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$15,000 ETH by Year-End? Etherealize Founders Lay Out the Path to a New High | Markets Outlook
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- [00:00]
A
At some point it's going to have its repricing from a few hundred billion dollars market cap to a multi trillion dollar market cap. And 1.15000 is still less than the $2 trillion market cap, which is still smaller than most tech companies.
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B
Pudgy Penguins has emerged as a standout NFT brand this cycle. A new Coindesk research report details how the company evolved into a multi vertical consumer platform that generating over $13 million in retail sales across Walmart. Target and Walgreens. Discover the data behind their digital funnel@coindesk.com research. Hey everyone, you're watching Markets Outlook on Coindesk and I'm Jen Senassi. We're seeing a full scale institutional race to put the world's financial plumbing on chain. And today we're talking about where Ethereum fits into that picture with Etherealized co founders Vivek Rahman and Danny Ryan. Hey guys, welcome to the show.
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A
Thanks for having us.
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C
Thanks for having us.
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B
All right, Vivek, I want to start with you. I know you've testified before the House on the Clarity Act. We had some big news today that markup is delayed indefinitely. Talk to me about how you're reading this situation.
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A
It's a wild journey because we got to testify on this quite early on. And it was pretty inspiring seeing last summer that there was literally a crypto bill beyond just stable coins, but actually addressing decentralization, actually addressing decentralized finance, actually addressing tokenization. And that's pretty bullish. Like once you start encoding blockchain and ability to innovate there and a lot, it just unlocks a lot of innovation and a lot of jobs and a lot of opportunity here. And when I was there, it was both sides of the aisle wanted a responsible bill to pass, which we all do. So I was actually pretty bullish that we would get something through right after genius. And I still think we do. I mean, I think that it's now advanced enough that it's in Senate. Obviously there was a bit of a setback with the markup being delayed, but I think that's a setback and not an indefinite thing that'll, that'll push up forever. I think we will get some sort of crypto legislation into law because it's good for both sides of the aisle. Like one thing we said in testimony was crypto's blockchains are bipartisan. Like it's not a political issue. It's literally infrastructure that the US should lead in. So I remain bullish. I think it's going to pass in my pass a little later than we thought, but I think we'll have something.
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B
I just want to ask one follow up before we talk about the Ethereum ecosystem and it is how you can remain bullish. And the reason I ask you this is because I've talked to a lot of folks in the industry. They're saying, you know, the more this gets delayed, the closer we get to midterms and then there are a whole slew of issues that present themselves. Just talk to me a little bit about what's behind you remaining optimistic about this.
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A
I think I've never seen as much industry willingness to not only adopt blockchains, but it's actually they need to adopt blockchains and they know they need to upgrade their processes and make the world digital and blockchains are the perfect rails for that. So it's not just coming out of one segment or one sector of the economy. It's broad based. So there's just, we're in the. Just like AI is now universal blockchains are at the cusp of being universal and there's a lot of people that want this to happen and there will be some details that we need to work out and it is a race. I mean there, there is a clock to it, but I think they'll work it out. It's too big of an opportunity to fumble for the U.S. danny, I want.
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B
To kick it over to you on the topic of the bill. Brian Armstrong came out and said a bad bill is worse than no bill at all, citing concerns about defi tokenized equity restrictions. Do you agree? And is no deal better than the.
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C
Current version as you see when legislation comes out, often that's kind of it. Often we don't see changes in major legislation for the next decade. Sometimes if not more so. I think he's right in that we have an opportunity to not only pass a bill, but pass a good bill. I guess Back to the timing. I'm still optimistic because there's a lot of urgency, right like Brian Armstrong came out and said that. But they have an incredible amount of urgency to try to get this done and so do tons of lawmakers across both aisles and pretty much the entire industry. So I expect to see things happening over the next, you know, few weeks, a month now.
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B
Danny, your career path is really fascinating. You were over at the Ethereum foundation even in talks to lead it at one point, but eventually made the decision to fund Etherealize. Talk to me about why you made that decision. What can you do at Etherealize that maybe you weren't able to do as the foundation back to kind of like.
- [04:41]
C
The political climate component of this, like the, the pendulum swung massively and so there's a significant opportunity to get this and I think world changing technology actually significantly adopted during this window. And so it seemed like one of the most important things that I could do. I previously was working on architecting the Ethereum protocol and working on major protocol upgrades and things at the Ethereum foundation. But this window is very critical. Ethereum's ready for game time, so I think someone's gotta, someone's gotta get it out there.
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B
Vivek, what's your outlook on Ethereum? Danny just said Ethereum is ready for game time. What does that mean for both of you as we head into 2026?
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A
I've always maintained since I found I'm, I'm way later to the Ethereum ecosystem than Danny and the people that actually built Ethereum, but I come from Wall street so I have a bit more of a commercial and enterprising just worldview on things. With that said, I've just had this viewpoint for a long time that Ethereum is actually a place to upgrade your business. And so for years and years I come from Wall street trading floors and I saw how inefficient everything was there and how much it could be upgraded if you just digitized assets, just like the Internet digitized information. And it still never happened until this thing called blockchain, specifically Ethereum popped up. So not only it's been, it's been a lot of upgrades, a lot of evolution, a lot of maturity, the technology, a lot of battle testing for Ethereum, our outlook for 2026 and onwards is Ethereum is now the best place to do business if you want to launch a new business. Integrating parts of Ethereum, tokenization, stablecoins, blockchain rails are going to unlock revenue, cut costs, just make business operations better. For existing large businesses, whether they're institutional or banks or Fintech or even like supply chain, integrating blockchains is going to be as important as integrating AI. So I think that Ethereum is now going to prove itself as the best place to do business for a whole host of reasons. It's the most neutral, it's the most institutional, it's the most secure, it's been around the longest, it's not controlled by anyone, it's never had downtime. So I'm really excited to see that thesis come to fruition. I think it's all going to accelerate literally this Year onwards, based on what.
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B
You just said, I think I know how you're going to answer this question, but I have to ask you, because multiple people have come on the show and said that Solana is the chain for institutions. Just talk to me a little bit about why Ethereum is so appealing to institutions, especially given your background on Wall Street.
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A
So I mean, I'll start it off like we got this question and I'll take the institutional Wall street view of not being a chain maximalist but wanting to find the best place to do business. Like I said, people will say Solana may be the institutional chain, but Robinhood chose Ethereum for its layer too. And why did they do that? So they can have their own customized environment. They can bring their user base, they can bring their tokenized assets, they can control their ecosystem and plug into the place with the most liquidity and most institutional precedent. Coinbase built their layer two on Ethereum. If we look just at some pretty recent massive data points, over the last few months, JP Morgan deployed their money market fund on Ethereum Main net itself. It was not another chain. The first place that they went to was Ethereum because it's been around the longest and it's the safest and most secure. Fidelity launched a money market fund last year on Ethereum. BlackRock Biddle is on Ethereum. And more than that, it's a global phenomenon. There are large European asset managers, Amund Baila Giffords one that have deployed on Ethereum. So other ecosystems can say what they want, but the institutional voice goes to Ethereum and there's a lot of data points behind it. And I think that lead's going to keep widening.
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B
Danny, I'd love to hear your perspective here. Why is Ethereum appealing to institutions? And what does it need to do to stay appealing?
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C
So for one, institutions aren't trying to build meme coin casinos. Institutions are trying to upgrade markets from first principles. They're trying to onboard trillions of dollars of capital and trying to do that in a secure manner. And nothing has the precedent that Ethereum does. Nothing has the standards that Ethereum does. Nothing has the security, the uptime, the reliability. And so all these things that we worked on for the past 10 years under the notion of decentralization, when you translate that, actually what that looks like for institutions and major financial adoption is into all of these things that they care about. No counterparty risk, 100% uptime, modular customizability, massive amounts of liquidity, it just decentralization. It's funny, I've been working on decentralization for a long time and I finally found someone that cares about it. But I think institutions are the first people to care about decentralization when you map it onto their worldview. But really I think that they're just a lens into this broader notion of what does the real world actually need out of these systems. When you move past some of the early, very exciting but early kind of crypto native use cases and you're talking about, you know, onboarding people's life savings, bringing tokenized equities, upgrading complex markets, like there's really only one answer right now.
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B
You said institutions really care about decentralization. Can you tell me a little bit more about that? What is it about decentralization that's appealing to institutions?
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C
They don't care about that word. They care about the features of the system that actually come from a decentralized system. Nobody can turn it off. No, there's no counterparty risk. Who are they trusting to use the system? Who are they trusting to make sure their transaction goes through? No one. Why? You know, we have this decentralized network of tens of thousands of nodes, hundreds of thousands of validators running this thing. Why does decentralization matter? You know, it matters because there's 100% uptime. It matters because in its entire 10 year history it's never turned off. There's no like I don't think there's any really analog system that finance is used to and digital system that's never had downtime. And again that was because Ethereum is and its community are meticulous about architecting decentralization into the protocol, into the Network, into the P2P properties, into the security of the system, into the development of standards, all of these things. And again, it's not that I go into talk to an institution, they say you know what, we need the decentralized thing. It's like no, they need, they need the thing that solves business use cases. It turns out that's by and large.
- [11:04]
B
Ethereum Pudgy Penguins has emerged as a standout NFT brand this cycle. A new Coindesk research report details how the company evolved into a multi vertical consumer platform generating over $13 million in retail sales across Walmart, Target and Walgreens. Discover the data behind their digital funnel and@coindesk.com research vivek we were just talking about market structure. Is the fact that market structure legislation hasn't passed yet a hurdle for institutions you're talking to?
- [11:35]
A
Surprisingly no. I think that market structure will help turbocharge the innovation that's already happening for blockchain adoption, I think it's going to give more rules of the road and it's going to allow for more innovation and, and it'll allow more players like banks and financial institutions to do more things on public blockchains. But I really think the Genius act was the thing that kicked off the secular growth trajectory for blockchains and specifically for Ethereum. Because the Genius act basically legitimized public blockchains into law and said that the marquee use case of tokenization is stablecoins. So far, I think there'll be a lot more. But stablecoins are now in law. Stablecoins are now accepted as not only commonplace, but everyone is in a race to integrate adopt stablecoins. And that's going to be mostly on public blockchains because you need that the properties of decentralization which Danny outlined, that's the only way to actually create the network effects from stablecoins. So the Genius act really unlocked the upside. Market structure will accelerate that. But even without, I'm still very, very bullish that the genius out of the bottle and you can't put blockchains back into a box anymore. People see what the upside is, right.
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C
To double click on that. The Genius act said this infrastructure is not illegal fundamentally and that you can do things with them. And it gave clarity on doing stablecoin type activities on it. Clarity act by and large is focused on the classification of new things. These crypto assets, these network tokens, these all sorts of that kind of stuff. And there's a lot in there, there's a lot of complexity, there's a lot of things that it attempts to address. But by and large to do things in traditional finance there are rules to the road. So you're allowed, you know, on the one hand you're allowed to use blockchain infrastructure that's made clear by the Genius act. And you're allowed to do legal things like trade things, use broker dealers, use equities in certain ways, use financial markets and intermediaries in certain ways. And just doing that and moving it into a blockchain doesn't really change the legality of those activities. That especially now that using a blockchain fundamentally has been de risked. So a lot of institutional financial activity feels entirely cleared to move on to these rails. It's really much more of these kind of crypto native things that we'd love to see clarity on and by and large may impact down the road. Innovation may impact how institutions are Thinking about some of these crypto native tokens or they're having their balance sheet with, how they're facilitating trading, that kind of stuff. But like we're going to see massive, just upgrades of the traditional financial system. Crypto tokens aside, it sounds like you're.
- [14:17]
B
Saying, you know, institutions really understand stablecoins, really understand how stablecoins can fit into their business models and are kind of all in on them. But when it comes to maybe some of the defi functions, something like market structure might help push that experimentation along. Am I right in summarizing that in that way?
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C
Yeah. And for a given institutional market, just encoding that market and putting it on chain and upgrading that market from first principles in a chain blockchain native way, they feel a lot of clearance to do that kind of stuff. It's much more like what is the classification of some random DAO token in relation to a defi protocol in relation to, you know, these very kind of crypto native assets. But institutional assets, there are laws around them and now they can do those legal things on top of blockchains.
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B
Vivek, I want to come back to you and talk about your ETH prediction. It was really making the rounds over the last few days. $15,000 by the end of 2026. Talk to me about what needs to happen for us to achieve that price.
- [15:23]
A
So this is a three part prediction, if you want to call it that. And again, prediction, not financial advice. But ETH is at its adoption inflection point. If we think strongly believe that the genius act was the thing that made Ethereum the best place to do business, the thing that made Ethereum institutional open for institutional adoption, then we're at the very early innings of that adoption cycle inflectioning up. And so I think a lot of things are going to happen. I think the stablecoin market cap was roughly 300 billion and that's going to 5x. I think that whether or not we get a clarity act, the stable coins are here to stay and they're going to go hockey stick exponential. So we get a 5x growth in stable coins. Most stable coins are on Ethereum growth this year. I think so. I think so. I mean this is all software. So I mean like you're turning money into software.
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C
That seems conservative to me, Vivek.
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A
I love to hear that say $1.5 trillion digitally represented. I mean whole world's plugged into the Internet, right? I mean there's no one that's not on the Internet. So when dollars get the superpowers of the Internet then it should, it's, it's better for business, it doesn't really hurt anyone. So I think that'll happen. Total tokenized assets across all blockchains is about 20 billion. Most of that's Ethereum. Again, even without the Clarity act tokenization, you can't put that genie back in the bottle. Every single player in finance wants tokenization to be integrated into their business. Larry Fink kicked us off in 2024 when he said every asset in the world will be tokenized, every stock and bond will be tokenized. That was like the shot heard around the world that everyone started mobilizing around. There's no reason that tokenized assets shouldn't be over 100 billion. So I think that's going to 5x and most of that again if we just keep going with power laws, is going to be on Ethereum. So ETH asset has been in purgatory for a little bit because of regulatory concerns, because of just a lack of adoption of the underlying network. Definitely. Despite regulatory uncertainty it still grew, but now all of that is going to turbocharge. So at some point I've always viewed ETH and Bitcoin as the two infrastructure layers for the entire blockchain ecosystem. And at some point ETH becomes a store value alongside Bitcoin. It's a productive store of value. It's a reserve asset, it's a Treasury asset. You're seeing now four micro strategy equivalents led by real people, Tom Lee and Joe Lubin and Andrew Keys and, and, and others that are actually buying ETH as Treasury assets. So at some point it's going to have its repricing from a few hundred billion dollar mark cap to a multi trillion dollar market cap. And 1.15000 is still less than the 2 trillion dollar market cap which is still smaller than most tech companies. ETH is bigger in a tech company. It's actually infrastructure. We call it civilizational infrastructure. So the value of civilizational infrastructure I think is multi trillion. And so that's what I think gets eth to 15,000. I think it happens pretty quickly.
- [18:14]
B
I think there are a lot of people watching that, that hopes that you're right. Vivek, I gotta ask you, coming back to market structure, one of the sticking points there is around stablecoin rewards. The American Banking association is fighting hard to restrict stablecoin rewards. If those rewards get restricted, does that change your outlook? And second part to the question, what does it tell you that the banking lobby feels so threatened by what's going on? It comes to stable coins.
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A
You want to start, Danny?
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C
Yeah, I mean I, I would say that genies have a bottle on stable coins. There's going to be massive demand for stable coins. Those that can provide and pass through yields in some manner will be largely be able to gather more liquidity and demand for their stable coins. So if the banks manage to have some sort of cartel control over that, then they will, you know, that will be, I think, where a lot of the stablecoin volumes, inventing volumes go. But I don't think that's going to change the fundamental demand for the stablecoins themselves.
- [19:15]
A
I would agree with that. I think that stablecoins themselves are such a business upgrade, they already cut so many costs and unlocks so much more commerce that I don't want to say it doesn't really matter. Of course it does. And of course people should be able to pass on yield, but there's other ways to do it. I mean there's, there's tokenized assets, there's tokenized money market funds. These are already proliferating. So the yield will go. I mean software and efficiency allows yield to go to the most efficient places. I think we can work a framework, it'd obviously be better if it were open to everyone, but I'm pretty pragmatic. I think it's still going to grow exponentially.
- [19:47]
C
And honestly, like yield aside, these allow for dollars to have computers embedded in them, right? And that's like a fundamentally massive upgrade. And as we begin to, I think, upgrade financial markets from first principles, being able to actually integrate capital flow and the delivery of dollars into the conditional components of a market, which is a huge, huge, huge upgrade compared to any other instantiation of the US dollar. So again, yields aside, the utility there is just massive.
- [20:19]
B
You know, we're talking about bringing trillions of dollars on chain here. Daniel, I'm going to kick it back to you. Is Ethereum ready technically to host all of those assets today?
- [20:33]
C
Yeah. Yes.
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A
Yes.
- [20:35]
C
The answer is yes. It is an incredibly secure protocol. It's an incredibly resilient protocol that's been proven time and time again and has like literally the best minds in the world for the past decade working on building a resilient system. The L1 gas limit has something like 2 or 3x over the past 12 months. And there's more gains in sight. And the shipping of peer Das pure data availability sampling and the amplification of scale through L2s is reaching order of magnitude gains given the upgrade that happened at the end of last year. So it's the right tech. It's a known quantity in terms of architecting applications and securing applications. This is secure and resilient protocol and it has the scale and increasingly we'll have more and more scale as the world onboards.
- [21:23]
A
One point on Danny's just excellent overview of whether Ethereum is ready. Ethereum is the only technology that we can stake our reputation, walk in institutional audiences and say this is the lowest risk place to bring your assets and digitize them and use a new technology. Finance should not be move fast and break things. Finance shouldn't be like run by companies, it should be run on infrastructure. And finance needs to be safe and secure. And we can walk in anywhere and say with a straight face that Ethereum is the place, the best place to bring your assets, the most secure place. No one's gonna get fired freezing Ethereum. It's really, really important and that's why we pick Ethereum. It's not just out of ideology, it's out of pragmatism too.
- [22:05]
B
And of course with institutional adoption comes the need for privacy. Institutions don't want all of their information out there publicly for everyone to see. What are institutions asking and how is Etherealized addressing that?
- [22:19]
A
Open blockchains, public blockchains had one limitation that was privacy. As we onboard the rest of the world, it is a core requirement. It's not optional. You're not going to have the world's transactions be publicly accessible everywhere. Ethereum has leaned very heavily into zero knowledge proof based technology for both privacy and for scale. And that's another multi year architectural design choice. And because of that we're seeing a lot of that come to fruition. The tooling is getting mature, it's becoming very secure. You saw first iterations of privacy when privacy wasn't really almost legal or it wasn't in legal frameworks. That's all changed.
- [22:56]
C
So now the, our general counselman was at a privacy roundtable at the SEC a month ago. Like the world has turned on its head, right? And it was innovative, forward thinking. How do we do privacy? How do we protect customers? How do we power markets and do business in these new public environments? So it's just like it's incredible. And ZK and advanced cryptographic techniques are certainly a piece of that. And sorry I'm jumping in Vivek, but there are increasingly private and secure environments that you can build on top of Ethereum. There are entire roll up type environments like Aztec that have privacy enabled instructions. There are private virtual machines that increasingly are not only scalable, secure, but able to be written and programmed in by normal developers. And it's more a matter of navigating the right tools to architect the right solutions. And so we put a lot of effort in working with institutions on figuring out, you know, a nice ZK powered stack that allows classically private market institution interactions to be powered on top of Ethereum. We're excited to share some more about that as the year progresses. But essentially things like you and I might do a trade, maybe some counterparty should be able to see the trade and not the price. We should be able to just, just like writing, solidity, write those types of interactions into code deployed onto a public blockchain and get it going. So we and many others kind of on the forefront of privacy architecture are very actively working on and releasing solutions in the space.
- [24:41]
B
Danny Vivek, thank you so much for joining me today.
- [24:45]
C
It was a pleasure. Thanks for having us.
- [24:46]
A
Thanks again for having us. It was a lot of fun. It's going to be a good year.