Bankless - 10 Bullish ETH Charts | Michael Nadeau

Episode Date: July 17, 2025

Ethereum is gaining steam, but is the real rally just getting started? Mike Nadeau of the DeFi Report joins us to break down Ethereum’s Q2 fundamentals and the 10 most bullish charts from his latest report. We explore why institutional demand may be driving this rally, how ETF flows and treasury holdings are accelerating, and whether ETH remains undervalued despite recent gains. Plus, we dig into the Genius Bill, stablecoin growth, real-world assets, and key onchain metrics that could fuel the next leg of Ethereum’s bull run. Michael Nadeau & The DeFi Report: https://x.com/JustDeauIt https://thedefireport.io https://dune.com/the_defi_report/the-eth-report ------ 📣BIT DIGITAL ($BTBT) | ETH-FIRST PUBLIC COMPANY http://bit-digital.com ------ BANKLESS SPONSOR TOOLS: 🪙FRAX | SELF SUFFICIENT DeFi https://bankless.cc/Frax 🦄UNISWAP | SWAP ON UNICHAIN https://bankless.cc/unichain 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle 🟠BINANCE | THE WORLDS #1 CRYPTO EXCHANGE https://bankless.cc/binance 🦎COINGECKO API | REAL-TIME CRYPTO PRICE & MARKET DATA https://bankless.cc/coingecko ------ TIMESTAMPS 0:00 Intro 2:29 Peter Thiel buying a 9.1% stake in Tom Lee’s ETH treasury company 4:03 Stablecoin institutional adoption 9:35 Active loans on ETH & L2s 11:49 Real world assets onchain 17:01 ETH in ETFs, net flows & ETH in treasury 24:22 ETH in smart contracts & balance on CEXs 27:36 MVRV/Fair Value & 200-week moving average 32:55 Market Cap vs. TVL & bull market math 35:32 ETH L2 & Yield Bear vs. Bull case 40:11 Closing & Disclaimers ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠

Bankless Nation, we have a special episode for you. ETH is catching a bid. These are the 10 most bullish ETH charts. We've got Mike Nato on today's episode. He just released the Q2 ETH Quarterly Report. And we picked out the five most bullish charts. We're going to talk a little bit about them. Mike, how you doing, man?

You feeling bullish? I'm doing great. Feeling good, Ryan. How are you today? Pretty good. I'm looking at this ETH price, 3,255 at the time of recording. Now, this is still well short of all-time high. And I'll also remind folks, this is also short of what we hit in December, which was

4,100, I believe. But still, there's some momentum going on in Ethereum right now. Do you think some of that can be explained by the fundamentals you're seeing in the Q2 quarter and coming out of that? I think so. I hope so. We went through the earnings call yesterday, today, I think, just kind of hitting on some of the key points that, you know, we didn't share, we don't share opinion when we do

these earnings calls. we want that just to be data only. Today we're going to go into, I think, a little more meaning, you know, try to shine a light into what's going on behind the scenes there and maybe a little more of a forward-looking call as well. Yeah, a few things going on this week. I think with respect to Treasuries, that's been really heightened this week. But what we're seeing is ETH going up on days when Bitcoin is actually going down.

So that happened a couple of times this week. And I haven't seen that in a very long time, Mike. I don't even recall seeing it this cycle. There have been days when Bitcoin was up a little and Ethereum was up a lot more, and those have been few and far between. But I don't think I've seen many days this cycle where Bitcoin one day this week, I think it was maybe yesterday, Tuesday or Monday. Bitcoin was actually down 2% on the 24 hour period of time,

and Ether was up like 4%. That doesn't happen every day. Huge shift. Huge shift there. This is what I've been looking for. I've been probably pretty early for calling this. I think a lot of people have been early calling this kind of shift in the ETH BTC ratio. But it does feel like we've bought them.

We've been at like five-year lows there. And like you said, like we haven't seen one of those moves where actually Bitcoin was down and ETH was up, you know, four or five percent over the last 24 hours. So to me, like this is what I've been waiting for. It does feel like we are at the very early stages of that rotation from ETH and then potentially, you know, a longer, longer tail as well. It's interesting to see that it seems like institutions are leading this or the institutional bid might be leading some of these price increases. I saw this just yesterday. Peter Thiel buying a 9.1% stake in Tom Lee's ETH Treasury company. So you guys know the Tom Lee ticker BNR.

That's just an ETH treasury, basically. And Peter Thiel, it's revealed about 9% of that. I think some of that is driving the momentum here. So we're going to cover some of the most bullish. This is probably selecting the most bullish or the more bullish charts that came out of your ETH Q2 report. There's some other charts in there that you should absolutely take a look at in order to get the full context for how Ethereum's doing, some charts with like, you know, revenue down,

of course, fees down, layer two usage up. But this type of thing, what we're going to dive into today are some of the more bullish elements. And it all comes from the ETH Q2 report. you can access the full reports free on the defyreport.io. There's also dune boards accompanying all of this. And before we dive in, want to give a shout out to the Q2ETH report sponsor. That is Bit Digital. The ticker there is BTBT. It's a public company. They just went all in on Ethereum. They sold their Bitcoin. There used to be a Bitcoin mining company. And they added a $132 million raise. They're holding at the time of recording over 100,000 eth right now, which I think positions them at number

two or three on the Strategic ETH Reserve charts as far as Treasury, you guys can learn more about them at bit-digital.com. All right, Mike. Let's get into some of the charts. Let's talk about the institutional adoption story. And I think that's got to start with stablecoins. Tom Lee calls stable coins crypto's chat gbt moment. And he's on CNBC talking about it just about every day. What are you seeing when you look at this chart on Ethereum of stable coin supply? This is our first chart in the Ethel Bull chart story we're telling today. Yeah, no, it's been, it's been a breath of fresh air to see Tom Lee on CNBC. You know, he's very well respected in the financial community going on, telling the story, talking about stable coins, talking about stable

coins as the chat GPT moment for crypto. And so this is a big part of the story, I think, for Ethereum. And we've got the Genius Act that looks like I was looking at the polygon at odds earlier, I think that's at 95% passage for this year. I think consensus view is that that will pass sometime this summer. And so this is to me one of the biggest moments, not just for like Ethereum, but for crypto at large. I think everybody's going to understand stable coins. I think anyone who's been in crypto understands the power of stable coins. And this is going to come to the masses. And I've actually been working on a report where we're going to go through some of the impacts of this bill and kind of what it can mean for fintechs.

We know like probably every fintech is going to be launching stablecoins soon. We know there's going to be impact on the banking sector and they're probably going to be forced to launch stable coins themselves. And, you know, there's just what this is going to do in terms of, you know, e-commerce, payments on the internet, global, you know, financial inclusion. You know, Bitcoin was supposed to be the vehicle to do that. but I think stable coins are actually the vehicle for financial inclusion. I was actually in Argentina and Buenos Aires for about five weeks last year.

And over here in the States, I would say this is not intuitive. Like, why do we need stable coins? This is not something that's intuitive to people that have bank accounts that live in an economy where there isn't like super high inflation, but everybody uses stable coins in Argentina. And it's just intuitive for them to do so. So I think this is a huge. This chart is, you know, in a secular growth pattern here, it's sort of leveled out a little bit in Q2, but looking for this chart to really take off potentially after this genius bill passes.

So this chart shows about ending Q2, $140 billion in stable coin supply on Ethereum. That's the majority of stable coin supply, and you're expecting that to increase as well. On the genius bill, actually, you know, Trump has called this crypto week. I think they're hoping to get it passed and push through this week. Now, there are some issues, you know, in Congress earlier, but with the vote. And I think Trump is working to corral the remaining holdouts in his party to get this across the finish line. So there's a decent probability that not only does it pass this summer, it actually passes this week. And if that passes, this means more stable coin supply on Ethereum.

and like even I was looking last night at a headline, like Jamie Diamond, who's infamously not a crypto supporter. He said even Jamie Diamond is like even a JP Morgan is looking to double down on stable coins. Jamie Diamond, this quote was like, I don't quite understand what people use these things for,

but we're going to be there in a big way. It was something like that. So we've already got PayPal, we've got Circle, we've got BlackRock. Of course, you know, crypto-native companies like Tether doing this, I think we're going to get all of the big banks to deploy stablecoin strategy on the back of the genius bill as well.

Yeah, I agree. And, you know, I'm expecting Stripe to potentially launch a stablecoin here. I just think, you know, when you really look at kind of what's coming here and through this bill, I think, you know, another piece of this is something that I would love to see is payroll. And it's kind of like, how do you get everybody to get a crypto wallet and start to use this stuff? And I think there has to be some sort of forcing mechanism to do that. And I think payroll is potentially that if you can pay people faster, right, get away from this weekly or biweekly monthly payroll. We'll see if that comes, you know, within the next year or two or so. But you got to get stable coins in everybody's hands, get them moving on chain. And I think, you know, you're going to see some of those, the on-chain economics for Ethereum really improved.

It's got 51% of all stable coins in crypto currently. On the L1, the L2s have another 4 to 5%. So about 55% of all stable coins are in the Ethereum ecosystem. So yeah, this is a big moment. We've even seen like Walmart talk about potentially launch. So even like major like retailers are looking at launching stable coins. So huge, huge moment here. This genius bill, I think when you go back to the last cycle in 21, there was a bill that,

that made it through the OCC or there was some ruling with the OCC related to stable coins, and Ethereum's bull run sort of kicked off at that moment. So potentially another catalyst here with the genius bill. Yeah, and I guess the theories of the institutions are deploying staple coins.

Maybe they also want to buy ETH as part of their deployment strategy on Ethereum. This is another chart that's showing activity on Ethereum, which is notable. These are active loans on Ethereum and L2s, and this is a good looking chart. It's basically all-time highs. Why is this significant?

This is significant. It's just showing more trust, more confidence in and using the, using defy within Ethereum. We've seen the stake rate is also at all-time hives in terms of the percentage of eth and circulating supply. So to me, this is just showing not only confidence in the protocol itself, but actually like people are in the markets. They're looking to get loans.

They're looking to access defy. There's probably more sort of rehypotication looping happening. So you just have more activity. This to me is a signal that there is demand for to access defy and take risk and do things with collateral. And it just sort of showing me that the ecosystem is is igniting a little bit under the hood. We just got, you know, that's a nice look at chart. That's really kind of the full picture over the last.

five years or so, and we've just kind of pushed through like the all-time highs from last cycle. And, you know, I've got a feeling that chart's going to go much, much higher in this cycle. We're up 98% versus prior year on active loans on Ethereum. Another reason I think this is significant is because it dovetails with the treasury strategy. Okay. So all of the billions of dollars, and there's basically a, you know, a three-to-five-way race for who, which of these publicly traded Treasury companies can acquire the most ETH, right? And they're not going to stop at a billion, I think. What a lot of them are doing is they're actively deploying this ETH as a productive asset inside of Ethereum and inside of the wider Ethereum economy, which means we could have a

defy sort of after boom effect on all of this. Because thinking about these treasury companies, you're sort of thinking about actively managed ETH funds. And where are they going to generate yield staking. That's kind of the risk-free rate. But then after that, it's going to be in some of these lending and borrowing protocols, like the Aves of the world, for instance. So I think that that's going to be an interesting story to watch. Real-world assets on chain. This is another part of the institutional story for Ethereum, just an almost hockey stick-like growth. A very, very clear assent line here from last year. We're up 205% on the year in terms of real-world assets on Ethereum. What is this showing you? Yeah, another good looking chart here. It's telling me that,

you know, more assets want to come on to Ethereum. You know, I think as we go here, the key thing to get this chart to sort of really hockey stick off, we've got 7.5 billion in assets right now. I think that's going to go much, much higher. But to me, it's going to be stable coins and most likely equities at some point here. We know Robin Hood is now building within the ecosystem. And so, you know, just getting more assets on chain is the first step. And then getting those things moving, right? So if you get more real estate on chain, we just showed the active loans and defy, that's more assets.

That's more collateral. That's going to make it into defy as well. People are going to want to sort of create capital efficiency out of those assets on chain. And so I think there's just like this reflexive sort of process here where as more assets come on chain, more things go into defy, more things, you know, are used as collateral. You get gas fees moving, impacts the burn. You know, the whole thing starts to take off. And crypto markets are incredibly reflexive.

Sometimes what actually kicks that off is the ETH price itself, right? So ETH price moves. People want to get on chain. There's more people coming on chain. And then all these other fundamentals actually kick off behind that. It's sort of the opposite of how it works in like traditional finance. Fundamentals usually come first and then the asset moves. So that's what I'm looking for with just seeing the price action of ETH of the last month or so

and then seeing the fundamentals improve on the back end of that. What's so interesting about real world assets as well is how large the volume could actually grow in terms of assets on ETH because we are at such a small amount at this point in time. Like we're celebrating the growth because it's from a 0% basically all the way to 7 billion right now. But that's just a drop in the ocean of all of the real world assets when you look at treasuries, when you look at stocks. I mean, this could grow, this could grow into the hundreds of trillions. In the wild west of defy, stability and innovation are everything, which is why you should check out frax finance. The protocol revolutionizing stable coins, defy, and Rolex.

The core of frax finance is FRAXUSD, which is backed by BlackRock's institutional biddle fund. FRAX designed FRAXUSD for besting class yields across defy, T bills, and carry trade returns all in one. Just head to Frax.com, then stake it to earn some of the best yields in Defy. Want even more? Bridge your FraxUSD over to the Fraxtal Layer 2 for the same yield plus Fractyl points and explore Fractyl's diverse layer 2 ecosystem with protocols like Curve, convex, and more, all rewarding early adopters. Frax isn't just a protocol.

It's a digital nation, powered by the FXS token and governed by its global community. Acquire FXS through Frax.com or your go-to decks, stake it and help shape Frax Nation's future. Ready to join the forefront of Defi? it frax.com now to start earning with FraxUSD and staked FraxUSD. And for bankless listeners, you can use Frax.com slash R slash bankless when bridging to Fraxel for exclusive Fraxel perks and boosted rewards. Ever wonder how industry leading companies like Coinbase, Metamask, and Phantom Wallet build products that always stay ahead of market shifts and new token listings?

It's because they all use the Coin Gecko API, the most reliable and comprehensive crypto data API, backed by a rock solid 99.9% uptime SLA. Builders, analysts, and businesses rely on Coin Gecko for real-time data on 9 million cryptocurrencies across 1,500 exchanges and 200 different networks. It goes beyond crypto prices to access liquidity, OHLCV, Dex data, metadata, NFT floor prices, and more, enabling your team to build and scale powerful products like wallets, oracles, exchanges, AI agents, and defy applications without limitations. Onboarding is easy with clear documentation and enterprise-grade support. That answers you faster than finality.

24-7 around the clock. Supercharge your product and build with Coin Gecko API today. Head to GCCO.io-slash-Bankless 10 and enter code Bankless 10 for 10% off any plan. Coin Gecko API, Crypto's most trusted and reliable data source. Ethereum's layer 2 universe is exploding with choices. But if you're looking for the best place to park and move your tokens, make your next stop Unichain.

First, liquidity. Unichain hosts the most list. liquid uniswap v4 deployment on any layer 2, giving you deeper pools for flagship pairs like ETHUSDC. More liquidity means better prices, less slippage, and smoother swaps, exactly what traders crave. The numbers back it up. Unichain leads all layer 2s in total value locked for uniswap v4, and it's not just deep. It's fast and fully transparent. Purpose built to be the home base for defy and cross-chain liquidity. When it comes to costs, Unichane is a no-brainer. Transaction fees come in about 95% cheaper than Ethereum

Mainnet, slashing the price of creating or accessing liquidity. Want to stay in the loop on Unichain? Visit unichane.org or follow at Unichain on X for all the updates. Okay, so that's ETH usage. We're seeing some institutional adoption there. How about purchase of ether the asset? This is chart number four. So we've been through the first three bull charts here.

Chart number four is ETH ETF assets under management. And we've seen some really strong inflows here recently. And we ended the quarter actually with ETH ETF assets under management at all-time highs, didn't we? We did. And that's, so that data goes through 630 that we're looking at right there. Just the updated number. So we had 4.1 million eth about 3.4% of the supply as of 630. That's already up to 3.8%. You know, two weeks later. Wow. And we're up to 4.6 million eth in the ETFs. This is somewhat, I think, of a, just hasn't been talked about so much. I think, you know, the ETH has done really well. I've got a few more numbers here.

just to kind of highlight that. So net flows, you know, since inception for the ETSs, now 5.7 billion for ETH. That's about, that's more than 10% or sorry, more than 20% of what Bitcoin's done. Bitcoin's got done 50 billion. I think a lot of people were actually sort of bullish on Bitcoin saying it was going to be 5 to 10 billion or so in the first year. We're already up to 50. Yeah, blew those records away.

And so, you know, you've got 5.7 billion already for ETH. we just mentioned 4.6 million in total ETH assets. If you put that in dollar terms, that's $13 billion in the ETFs. And like I said, we've had $1.2 billion in inflows just in the last few weeks. So yeah, here's the net flows chart. And you can see like on the right side there, we're starting to kind of get to those levels that we saw in Q4 of last year. So ETF's looking good. It seems like institutional investors.

This is a line that Tom Lee has used of, like, Ether being the next Bitcoin. He's trying to put that out there to show what's possible. What if Bitcoin follows something like what... What if Ether follows something like what Bitcoin just did, right? With respect to the ETF flows. This is a new story that kind of emerged in Q2, but has just continued momentum into Q3, is the amount of ETH held in Treasury. So I think I'm reading this, right?

almost a 6,000% gain in terms of the amount of ETH held in in treasuries. Most of this is public treasuries, right? That investors can buy in U.S. capital markets. Correct, correct. Yeah, this is obviously picking up a lot of steam with what Tom Lee's out there.

We've got Bit Digital number two added added over 100,000 E, sold all their Bitcoin. So this is a very interesting story to me. I mean, you've seen Joe Lubin on CNBC from Sharplink, you know, talking about, you know, basically putting a bid on the token and just the importance of this. Like, I think this is something that people don't talk as much about, but Bitcoin has just done a better job of this with Michael Saylor being out on TV almost every day, on podcasts every day, just telling the story and also going on and buying the asset. We're seeing, we're seeing that from the Ethereum community now. I think this is, this is, you just can't ignore this. It's very important, I think, just to see these sort of shifts in the market, and we're seeing one right now.

And so, yeah, this is another bullish indicator for me. I think that the shift is if Eith can cross that chasm into becoming kind of a store of value type asset, recognized in similar ways that Bitcoin is. That's the chasm it's trying to cross right now. And it took Bitcoin, like, over a decade to cross that chasm. And ultimately, essentially, that was sealed, I feel like when Michael Saylor, started buying and convincing all of the rest back in 2020. And so maybe something similar is happening to Ether around here along these lines.

Circulating supply. So what is ETH's issuance policy showing us? Yes. So, yeah, as you mentioned, you know, store of value and looking at that as also a compelling reason to buy the asset. And this plays right into that. So circulating supply, we're up just, you know, 0.18%. in Q2, that's during a quarter where blob fees were down 80%.

Right. So that's blob fees are 100% burned, right? So that burn is going to offset, offset the issuance. And also base fees are burned. And so those two factors are what are going to drive sort of deflationary token economics for Ethereum. And to me, what's, I think what's bullish about this is that you had a quarter in Q2 where the on-chain economics were significantly down,

because of the petrol upgrade. And so as that's playing out, the supply is still, you know, it's still under what Bitcoin's doing in terms of inflation. So it is kind of an interesting. When you start to look at that and you say, okay, this thing has very interesting token economics that work with the protocol. They're not fixed. But even when on-chain activity is way down and you have network upgrades happening,

the supply still is not like, see. the issue in systemic exceeding Bitcoin. That is interesting because now you've got something that looks like it's sort of a store of value asset like Bitcoin, but we know ETH also has the yields, right? And so then these ETFs, I believe there are applications out there that we should see one of these go through towards the end of the year that are going to allow some of that yield. We pass to the ETF holders. So that is interesting when you, maybe you've already been in the market and you've been buying

Bitcoin and you're buying the Bitcoin ETFs, now you're looking at this setup. Maybe you want to rotate some of that and capture some of that yield if that product is available. So I think the store value piece is interesting because then it pairs nicely with the fact that you have yield and Bitcoin doesn't have yield. Yeah, it's fascinating as investors start to understand this because Bitcoin is kind of like fixed supply, of course, like 21 million and there shall be no more. Whereas ether is kind of like fixed issuance, at least on the year. It kind of oscillates. It can't go higher than 1.45% And if you annualize this,

this looks at about like the 0.45% level in terms of its annualized issuance, which is less than Bitcoin right now. Bitcoin is something like 0.85%, something along those lines. If you look at other store value like gold, you know, one to 1.5% in new issuance every year, depending on the price of gold.

So that's fascinating. And I'll remind folks, too, if you weren't here during like 2021 and that bull cycle run up, Ethereum did not have a strong monetary policy at that time. It was pre-merge. People didn't really understand what's happening. Recall that the merge actually happened sort of after the summer of 2022 crash and then September, the merge happened. And now Ethereum's issuance policy, monetary policy, is much more hardened than it was. It's definitely not well understood yet as the, you know, Bitcoins is, but could become understood this cycle. And there's certainly some supply dynamics

working in Ethereum's favor. Okay, this is another supply sync type metric, which tells an interesting story. This is the percent of supply in smart contracts, Ethereum smart contracts on chain. This number is down at least to prior year, but you can sort of see a growth trend here. What does this tell you? Yeah, so, you know, this is telling me, So we're at like 43% of the supply that's, that's currently in smart contracts. So it's, that's 43% of the supply is on chain. And so it's telling me when you're seeing that line go up like that over a longer period's time, it's telling that generally speaking people feel more confident, you know,

pushing their assets into defy, into staking contracts, and using the protocol, using their assets as collateral within the protocol. So to me, this is, this is, this is bullish. and it just shows that, you know, there's more applications, there's more things you can do with your assets on chain. And, you know, I expect this to continue to go up, to continue to rise over time. That slide in graph pairs nicely with this,

which is the ETH balance on centralized exchanges, and that is at all-time lows, almost all-time lows. It's an eight-year low here on the chart. So ETH supplies is bleeding off of exchanges, it looks like. Yeah, it's kind of like the reflect. of the chart, you know, we just showed where, you know, assets are coming on chain. They're, coming from centralized exchanges for the most part. And so, yeah, this is sort of just the other side of that. It's, it's, you know, I think this is bullish from the perspective of not only are

people moving assets on chain, but they're moving, if they're moving assets that were sitting on centralized exchange and then they're putting that into staking contracts, like to me, that's a little bit more of like, I'm committing capital to the chain. I'm probably more of a long-term holder, more of a store value type investor if I'm putting stuff into staking. And so if that's happening, then you just have less of the asset available for sale on exchanges as well. So the bull case to be told, I guess at this point, just maybe summarize, we're seeing some institutional adoption by way of stable coins, certainly, and real-world assets that should accelerate on the back of the genius bill. And then we're seeing an institutional bid start to come through.

We're seeing that in ETH ETF flows. And then also these treasury companies, as the narrative is propagated by people on Wall Street, Tom Lee, Joseph Lubin, those types of folks. And then we're seeing supply dynamics stronger than they have been in the past for Ethereum, both in terms of a hardened monetary policy with very low issuance. And then also, you know, ETH being low. locked up in these smart contracts and bleeding off of exchanges. So that sets us up for the question that all investors, I think, want to know at this point is just like, well, is ETH cheap, though? Like, is now the time to buy? It's had a recent run. Where were we at like $1,500 a couple months ago, something like this? Yeah. Yeah. Okay. So now we're close to, we're double that at this point in time.

Have people missed it? What's the fair market value of this asset? And you've got a story to tell here. So this is the MV RVZ score. What is this telling us? So this is market value to realize value. Glass node data here. So shout out to Glass node. This is looking at really, you know, what is the proxy for cost basis of all tokens on the network?

Glass node does a really good job of analyzing. This is just the on chain wallet. So it's not factoring in ETFs or assets on exchanges. But essentially, you know, calculating what is the cost basis based on coins moving? of these wallets and then comparing that to the historical, you know, average cost basis of the network. So at the end of the quarter, we were at like 0.3 in terms of the Z score. That's like the standard deviation from the historical norm. And the five-year average is about one. So you're still looking like actually pretty fair value. You know, at the end of the quarter, we've continued to

move up in price here over the last few weeks. So that this number is currently at 0.8. So it's getting closer to that like, you know, five-year historical norm. But as you can see in the chart, too, this has done a good job of sort of highlighting good entry points to buy the asset. And then also when the market's getting overheated, the, you know, market value is going to detach from that sort of historical, that average cost basis of the coins on the network. So it looks pretty good still to me, even at these current levels. historical norms. So if we're at 0.8 now and one is kind of 1.04 is kind of the historical norm, right? Yeah. We've also seen bull markets that get far above one going to like,

you know, three and four. When do you feel like things start to get overheated on the MVRV index? They're not yet, but when we get to like twos and threes, do you start to say, okay, this is this is animal spirits? Yeah, I think for me it's looking at, a number of different factors. So this is one of, this is certainly one of them. And we have, I think, a chart coming up here. We look at the long-term moving average. So the 200-week moving average is another indicator that that will be looking at. I would say right now, like with that point eight, and you just imagine, like, we have had a pretty significant move here over the last, call it, you know, two months or so, two, two, three months. And so if you

look at some of the more shorter, shorter term, we don't really trade Eath, but like, we look some of the more shorter term stuff, you're looking like a little bit overheated right now. So maybe we'll see a pullback. But on the longer term stuff, you can see that these look like fair value zones. So this is another one that we look for kind of the confluence of not just MVRV, but we look at 200 week moving average, a bunch of other factors we're looking at. But this one, we're also just kind of looking, you know, typically the price will bottom when you get close to that 200 week moving average.

we actually broke through it pretty significantly in the tariff selloff earlier this year. Broke through to the downside. To the downside, yeah, sorry. To the downside, you can see there. That was like the biggest move below the 200 week moving average. So it looks like a very good, you know, potentially a generational buy opportunity there.

And we've since rebounded off of that, but we're just kind of above the 200 week moving average. Now it's around 2,500 currently. So we are, we're starting to detach from that. a little bit. But as you can see, that when you get into a bull market, you do detach from that purple line there. And we haven't done that just yet. Imagine if your checking account and defy wallet finally spoke the same language. That's Mantle banking. An all-in-one fiathe crypto account. It lets you save, spend, and invest all from one dashboard. Swipe for coffee,

stake ME3 through yield, or even use virtual cards for payments through Apple Pay. So it feels Web2 simple, yet stays Web3 sovereign. For allocators, meet Mantle Index 4, the S&P 500 of crypto. The tokenized institutional grade fund, ceded with $400 million from the Mantle Treasury, and balance across Bitcoin Ether, Seoul, and yield-enhanced stables. One asset, broad exposure, pure defy-composability. The momentum is real. M-Eath faults, FBTc bridges, and a $2.4 billion community treasury are all powering the next phase of on-chain finance. Mantle brings real-world access, yield, and utility to digital assets.

Ready for the next era of on-chain finance that actually belongs in 2025? Explore Mantle at mantle.xyZ or follow Mantle underscore. official mantle bridging tradfi and defy so you don't have to finance is the world's number one crypto exchange over 275 million users already trust their world-class security finance makes starting crypto as simple as it should be whether it's learning about crypto on finance academy or browsing hundreds of assets and viewing your newly created portfolio in a clear easy-to-track dashboard finance helps you go at your own pace for hardcore traders binance pro opens up industry leading services for trading professionals with fully bespoke trading products along with a suite of white-gloved

for VIP and institutional clients. Need support? 24-7 customer service is on hand whenever you need it. And with some of the lowest fees and deep list liquidity in the market, is no surprise why over 275 million users trust Binance for everything crypto. Download Binance today and get started in minutes. Binance is not available in certain countries, including the United States. Check its terms for more information. Another metric that's interesting from a fair value perspective is market cap versus

TVL. I don't think people are paying as much attention to this as maybe they, should. Why do you think people should pay attention to this? Yeah. So this is, shout out token token terminal here. This is ecosystem TVL. So, you know, it's got not just TVL in D5, but it's got stable coins. And so it's a, it's a larger TVL number to kind of holistically look at the ecosystem. And what we can see here is like, the price, just, the market value tends to collapse to the ecosystem TVL during the bare markets. And so, you know, That to me, it's almost like we try to find ways to do like comparisons to stratify type metrics

and book value is one. We've been trying to figure like what would be the book value of the chain be. And this is one way to think about it. And it's interesting to me that, you know, when the price has collapsed down to what we're calling book value ecosystem TVL, we've seen a bounce each time, each time that's happened. I did some bull market math here, Mike, in my tweet thread about these charts. And the bull market math was like, let's say hypothetically, TVL grows to $1 trillion on Ethereum. And we're at what this looks like under $300 billion right now.

Right around there, yep. And you could see that happen with the growth of stable coins. Let's see that gets to $500 billion or something like that. This is totally possible. Real world assets gets to $100 billion. And then all of the crypto-native assets kind of like pump. You could see, you could do some math and get to the $1 trillion amount. And then if you multiply that by some of the higher TVL multiples, market cap versus TVL, like a 2.5, then you get numbers like eth equaling 20K.

All right. And so that's how this math can kind of work on the bull side. Of course, we don't know what's going to happen, how much TVL will actually be deployed on Ethereum. But this tells us story. We've got to watch that purple line, I guess, in this bull cycle. Very interesting. And then, of course, once you get those stable coins in, that is setting a base, right, for, you know, in the bear market as well. So this will be very interesting to keep track of this.

But, yeah, that's a great way to think about potential valuation as more assets come on chain. Well, that's great. Those are the most bullish charts we could pull from the DeFi report, ETH Q2 report. So you can access all of that on the defyreport.io. Like there's one other thing, there's some other charts with another story here that we didn't cover today. But I want to get your general sense because there's a way you can interpret it in a bullish fashion or there's a way you can interpret it in a more bearish fashion. What I saw in the ETHQ2 report is obviously revenue was down. So fee revenue was down for Ethereum, you know, MEV revenue, all of that cumulatively was down, which meant that real yield was actually down relative to the last bull cycle we saw.

on Ethereum, let's say, and just like in general. And part of the reason why is because Ethereum with its Pectra upgrade has been expanding block space supply. Not on layer one so much, although it's starting to do more of that in incremental ways, but certainly on layer two. And so layer twos haven't like been paying as much as they should, maybe to some, not been paying their fair share. And there's a narrative out there that that's because layer twos are kind of, you know, taking usage, taking business, taking MIV, taking fees from Ethereum. main net and they're quote unquote parasitic to Ethereum, okay? So that's the bear take. You see, you see an asset and you see real yield down, you see rev down, and you're like, okay, like what's going

on? We could be bearish here. The L2 thing, maybe that's not so good for a ETH value accrual, okay? But then there's the bulk case you could take, which is to say that all of these upgrades are efficiency and productivity upgrades to the Ethereum network, and essentially the blob space increases, well, that's stimulus to the Ethereum economy. What you all, you all, also see in the charts from Q2 in your fantastic report is massive increase in usage for Q2 for layer 2. So active addresses are up, you know, transactions are up. There's more users, more transactions. Now they're paying less, but maybe that's a good thing because we are onboarding more people effectively locking them into the network effect of the EVM and into

Ethereum. And that will translate to more REV later or more ETH holding, more storage, more storage. of value usage of ether the asset. And that's the more bullish take you could have, which is like, no, this is layer two strategy like working pretty well as designed. And ETH is essentially going to make it up, make up for revenue in network adoption, you know, more users, and being exported as a store of value asset. So there's the two sides you could kind of look at the Q2 numbers with. When ETH price is going up, there's a tendency to be like, oh, no, the bulls were right.

You know, when ETH price is going down, when it's at 1,500, you're like, okay, L2's are parasitic, the whole thing was a bad idea. What's your take on this? As you sort of weigh the bull case and the bear case on the L2 numbers and the yield numbers for Ethereum coming out of Q2. Yeah, this is a great, I mean, this is a great topic to explore. I mean, my view on this is that the roadmap is going as planned, right? I think that's pretty clear when you look at the growth of L2s, when you look at the value,

you know, why did Coinbase launch it launch an L2? Because it's valuable for their business. Why is Robin Hood doing it? It's good for their business. So to me, the story there is like if you're, if you think of, I know Ethereum's not a business, but they do have a product and they need people to adopt that product. You have product market fit, right? So to me, that's important to start with.

And then the next piece of this, and anybody, who's ever started a business knows you start with product market fit, and then you have to get your pricing and you have to find ways to, you know, build leverage or deal with competition and Ethereum's in that process right now. And so as the L2s, you know, come in and they adopt Ethereum, if you can build a network effect and continue to provide really good services to those L2s, I believe the economics will sort themselves out. And, you know, the margin that the L2s get will hit whatever the markets,

says is appropriate. And that's just kind of how it should play out to me. So that's my view. Like it's absolutely true that the real on-chain yields are down. Ethereum is in this transition period right now. But if you have product market fit, you should have pricing power. You know, later on, we could probably do a full episode on native roll-ups and kind of what the path to do that is. But that's kind of my view on this. And it's up to the Ethereum Foundation, up to the Ethereum community to execute on this and find that equilibrium where the right amount of value is making it to Ethereum validators and to Heath holders as the L2s obviously get lots of value off of building on Ethereum.

Well, we may be early into the ETH rotation. Certainly, we're not sure yet. We haven't seen the price moves to fully justify that. So it's still a little bit early. But Mike, thank you so much for providing these charts for the community. We certainly appreciate it. Yeah, thanks for having me, Ryan. Guys, we'll include links to both the DeFi report, Q2, where you can access all of this,

and also the Dune Analytics Report, so you can see all of this in real time as it evolves. Got to let you know. None of this has been financial advice. Crypto is risky. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.