Ethereum demand grows after Fed announces $10T asset tokenization plan, pushing focus on $5K and institutional buying.
Ethereum’s market is drawing global attention as the U.S. Federal Reserve prepares a large-scale tokenization program valued at more than $10 trillion by 2030. This development places Ethereum at the center of a growing shift in digital finance, sparking debate on the asset’s potential trajectory in the coming years.
Fed Tokenization Plan and Ethereum’s Role
The announcement that the Federal Reserve intends to tokenize assets using the Ethereum blockchain has fueled interest from traders and institutions.
According to Wimar.X on social media, the plan could see over $10 trillion in tokenized assets secured on Ethereum by the end of the decade. This figure is around twenty times the current market capitalization of Ethereum.
🚨JUST IN: FED TO TOKENIZE ASSETS USING THE ETHEREUM BLOCKCHAIN
OVER $10 TRILLION EXPECTED BY 2030
THAT’S 20 TIMES MORE THAN $ETH ’S CURRENT MARKET CAP pic.twitter.com/iU4wpVn1dK
— Wimar.X (@DefiWimar) August 21, 2025
Ethereum has long been used as the foundation for decentralized finance, non-fungible tokens, and layer-2 solutions. The adoption of its blockchain by the Federal Reserve introduces a larger scale of usage and may increase institutional demand.
The use of Ethereum in asset tokenization positions it as a leading network for both retail and enterprise-level digital finance.
Market analysts suggest that Ethereum’s reliability, scalability improvements, and widespread developer ecosystem make it a strong candidate for such large-scale programs. While the details of the Fed’s implementation are still emerging.
The association of Ethereum with this initiative signals rising confidence in its long-term role in financial infrastructure.
Market Movements and Trader Expectations
Ethereum is trading near $4,268 after recent volatility, with investors watching closely for the next direction.
A sharp 10.3% drop to $4,100 this week dragged major altcoins to weekly lows. The correction came after weeks of steady accumulation by larger holders. Despite the decline, the RSI for Ethereum remains near neutral levels, showing no extreme selling pressure.
TedPillows, a market analyst, highlighted that the global M2 supply correctly predicted Ethereum’s dip, and he forecast a potential rise to $5,600 before a major correction. He also noted that the U.S. government purchased over 332,000 ETH worth about $281 million, further increasing speculation about institutional interest.
Global M2 supply predicted this dip perfectly.
The next stop is $ETH hitting $5,600 before any major correction. pic.twitter.com/A3rau6u9P6
— Ted (@TedPillows) August 21, 2025
ETH traders are also looking to remarks from Federal Reserve Chair Jerome Powell. His upcoming speech at Jackson Hole may provide clarity on interest rates and liquidity conditions, both of which could affect risk assets.
Market observers note that if Powell adopts a softer tone, Ethereum may climb toward the $5,000 threshold, which is viewed as a strong psychological level.
Ethereum Demand and Broader Ecosystem Growth
Nonetheless, Ethereum demand is increasingly being used in financial discussions as investors assess both short-term price movement and long-term adoption.
Beyond its role in decentralized finance, ETH remains the foundation for smart contracts and decentralized applications. It supports NFT marketplaces, staking pools, and layer-2 scaling solutions, which add utility and attract ongoing investment.
The tokenization plan outlined by the Federal Reserve adds another dimension to Ethereum’s outlook. If executed, it could bring traditional assets such as bonds, equities, and real estate into a blockchain-based system. This could expand ETH demand from both retail traders and large financial institutions.
With ETH at the center of the Federal Reserve’s tokenization plan, analysts and traders are monitoring whether demand will translate into sustained price growth in the years ahead
