The landscape for Ethereum is poised for a notable shift as analysts predict a substantial increase in its total value locked (TVL) by 2026. This optimism comes amid a mixed market sentiment, where despite growing on-chain adoption and institutional interest, the price of ETH has been underwhelming. Currently trading around $2,924, ETH has seen a decline of over 12% over the past year, indicating a disconnect between its fundamentals and short-term price movements.
Joseph Chalom, co-CEO of Sharplink Gaming, forecasts that Ethereum”s TVL could potentially increase by tenfold by 2026. This prediction is largely driven by the rapid adoption of stablecoins and the burgeoning market for tokenized real-world assets (RWAs). The stablecoin sector is expected to expand from approximately $308 billion to $500 billion by the end of next year, with Ethereum currently hosting more than half of all stablecoin activity. Such growth could significantly enhance network usage and attract more capital inflows.
In addition to stablecoins, Chalom anticipates that the tokenization of RWAs could reach $300 billion by 2026, as major financial institutions transition from pilot initiatives to comprehensive on-chain offerings. Industry giants like BlackRock, JPMorgan, and Franklin Templeton are already enhancing their blockchain strategies, solidifying Ethereum”s role as a preferred settlement layer.
Supporting the narrative of increasing institutional adoption, Ethereum”s network security has also seen significant growth. Reports from Milk Road reveal that Ethereum has escalated from zero ETH staked in 2020 to over 32 million ETH staked by 2025, securing more than $105 billion in economic value. The number of active validators has also surged, with participation climbing from none to over one million.
While Bitcoin showcases its security through hashrate, Ethereum emphasizes economic security, which is becoming increasingly critical for institutional investors. Tom Lee, co-founder of Fundstrat, believes that Wall Street”s push to tokenize equities and financial instruments will greatly benefit Ethereum. He highlights Ethereum”s neutral architecture, consistent uptime, and robust developer ecosystem as reasons it stands out for institutional tokenization.
Lee has reiterated his bullish outlook, suggesting that ETH could reach between $7,000 and $9,000 in early 2026, with the possibility of climbing towards $20,000 in the longer term if adoption accelerates. He posits that Ethereum might eventually rival Bitcoin”s dominance as real-world applications expand.
Despite the improving fundamentals, Ethereum”s price continues to face downward pressure, trading near $2,900. Analyst Benjamin Cowen cautions that broader market conditions, particularly those surrounding Bitcoin”s cycles, may postpone a significant breakout for Ethereum. Nevertheless, with rising TVL, increasing institutional interest, and fortified network security, Ethereum”s outlook as it approaches 2026 appears increasingly promising. The groundwork seems to be laid not for fleeting speculation but for sustainable, utility-driven growth.
