Structural Transformation of the Crypto Asset Market through the Entry of Institutional Investors and Clarification of Regulations from Achieving $1 Trillion in Realized Market Capitalization to XRP's Highest Price

 

Introduction

The overall crypto asset market is booming, with Bitcoin's realized market capitalization surpassing $1 trillion for the first time in history and Ripple (XRP) reaching its highest price in 7.5 years. At the same time, the regulatory environment for crypto assets in the U.S. has changed significantly, and institutional investors are accelerating their participation. This article comprehensively analyzes these trends and discusses future market prospects.

Institutional investors are in full swing: a strategic decision by Schwab

Charles Schwab, one of the largest brokerage firms in the United States, has announced that it will soon launch physical trading services for Bitcoin (BTC) and Ethereum (ETH). The announcement, made by company CEO Rick Wooster, symbolizes the rapidly lowering barriers between the traditional financial and crypto asset industries.

Wooster explained that strong customer demand was behind the launch of the service. Many clients already own crypto assets, and there is a growing need to consolidate their assets on Schwab's trusted platform and manage them together with stocks and bonds. This indicates that crypto assets have moved from being mere speculation targets to being recognized as part of a portfolio.

Schwab's entry into the market means direct competition with the leading crypto asset exchange Coinbase. Worcester clearly acknowledges this point, stating that the company will seek to acquire customer assets on the strength of its own reliability and integrated services. This move creates an interesting competitive structure.

Meanwhile, Coinbase also continues to perform well, with its stock price reaching an all-time high on July 18 and its market capitalization surpassing the $100 billion mark. Behind this stock price rise was the passage of important crypto asset-related bills in the U.S. House of Representatives, including the GENIUS Act and the CLARITY Act, which contributed to improved investor sentiment.

Competition between companies with different origins, such as traditional securities firms and crypto asset specialists, means a wider choice of services for customers and is likely to contribute to the healthy development of the overall market. Schwab has emphasized its policy of applying the same rigorous custody standards as traditional securities, which may make it an attractive option for investors who value safety and reliability.

Ethereum Recovery and Expectations for Q3

The recovery that Ethereum (ETH) showed in the second quarter of 2025 is remarkable. According to a joint report by crypto asset analysis firm Coinbase and Glassnode, U.S. physical Ethereum ETFs recorded a net inflow of $1.7 billion in the second quarter. This is a significant turnaround from the $200 million net outflow in the first quarter and indicates a clear recovery in institutional interest.

This improvement in inflows suggests that Ethereum is consolidating its position as the second largest crypto asset on the market. Although positioned second to Bitcoin, Ethereum's smart contract capabilities and its unique value as the foundation of the DeFi (decentralized finance) ecosystem offer different attractions for investors.

Technical improvements in the Ethereum network have also contributed to the restoration of confidence in the market. As a result of the Layer 2 solution processing more transactions, overall network throughput increased by 7% and the average fees paid by users dropped by 39%. This significant reduction in fees has made on-chain application deployment more economical and facilitated the growth of the entire ecosystem.

In addition, ethereum inflation has remained moderate at approximately 0.75% per annum, allaying concerns about long-term supply pressures. This is a reassuring factor for investors and is thought to be contributing to greater price stability.

The growth of the DeFi (diversified finance) ecosystem has also been steady. The total value of assets locked in the ecosystem (TVL) has reached $63.2 billion, indicating the growing use of Ethereum-based financial applications. This is not just a speculative move, but a sign of growing awareness of this financial service as a practical one.

The booming derivatives market is also worth noting. Average daily trading volume in perpetual futures reached $51.4 billion, up 56% from the previous quarter, and open interest in futures reached $14.5 billion at the end of June. These figures indicate that market liquidity is deepening, suggesting that the market is becoming more accessible to more investors.

Bitcoin's Historical Achievement and Potential Risks

Bitcoin has surpassed $1 trillion in realized market capitalization for the first time in history, which means more than just a number. Realized market capitalization is a metric based on the price at which each coin was last traded on the blockchain, and unlike traditional market capitalization, it more accurately reflects the capital actually invested in the network.

This indicator is valued in the industry as a reliable barometer of investor confidence, and the achievement of $1 trillion indicates the long-term commitment of institutional and other large investors. This year alone, 25% of the total realized market capitalization has been added, confirming the continued acceleration of capital inflows.

According to an analysis by Joanne Wedson, CEO of blockchain analysis firm Alfractal, $123,370 serves as a key resistance line. The company's analytical model predicts that if this level can be breached, the next major price target range would be between $143,000 and $146,000.

While these technical analyses are important indicators for market participants, it goes without saying that there is always uncertainty associated with price forecasts. Nevertheless, objective analysis based on data has a certain value as a basis for investment decisions.

On the other hand, there are also potential risks in the market. According to Alfractal's analysis, long positions in the derivatives market that bet on higher prices have prevailed in recent months. While this reflects bullish market sentiment, it also increases the risk of a “long squeeze,” where these positions are forced to liquidate when prices fall.

This phenomenon has been observed in the past and can contribute to sharp price declines. For market participants, this demonstrates the importance of not getting carried away by strong market conditions, but rather of managing risk thoroughly. Even in a long-term uptrend, a short-term adjustment phase may be inevitable.

The Changing Regulatory Environment and XRP's Breakthrough

There has been a historic development in the regulation of crypto assets in the United States. President Donald Trump signed the GENIUS Act into law. The law provides clear and friendly regulation of the $250 billion stablecoin market and represents a major shift from the traditional cautious stance toward crypto assets in the United States.

Ripple CEO Brad Garlinghouse hailed the passage of the bill as “a historic day for the crypto asset sector.” A team including Ripple's Chief Legal Officer, Stuart Alderoty, was invited to the White House for the passage of the bill, indicating the high expectations of industry participants.

This improved regulatory environment led to a dramatic price increase for Ripple's crypto asset XRP: on July 18, XRP reached $3.65, breaking a seven-and-a-half-year high recorded in early January 2018. In the past 30 days, XRP has risen by about 60%, showing the extent to which regulatory clarity has impacted the market.

XRP's price increase is truly a long-awaited accomplishment for Ripple, which has been embroiled in a legal battle with regulators for years. The improved regulatory environment, coupled with the practicality of the international money transfer solution promoted by the company, has contributed significantly to restoring investor confidence.

The surge in XRP is not an isolated phenomenon, but is indicative of an improved regulatory environment for the crypto asset market as a whole, with the passage of the CLARITY Act and a series of other bills resolving long-standing regulatory uncertainty for the industry and significantly lowering barriers to entry for institutional investors.

This improved regulatory environment will be a critical factor in the future development of the market. The ability to operate under clear rules will make it easier for companies to develop business plans and for investors to assess risks. As a result, it is expected to promote the healthy growth of the market as a whole.

Current Analysis from Market Data

Currently, the total market capitalization of the entire crypto asset market has reached $3.94 trillion. Bitcoin hovers around $118,300, maintaining a market share (dominance) of approximately 61.7%. Ethereum is trading at about $3,580 and Solana at about $176, with the major crypto assets holding steady across the board.

These figures indicate that the market is entering a period of maturity. Bitcoin dominance of over 60% means that the market is still bitcoin-centric, but ethereum and other altcoins are also steadily gaining market share.

On-chain data indicate a marked improvement in market sentiment. Particularly in Ethereum, the percentage of coins in profitable status jumped from less than 40% at the end of the first quarter to about 90% at the end of the second quarter. This indicates that many investors are in a state of unrealized profit, which indicates the health of the market.

The improvement in these indicators suggests a growing interest in crypto assets as a long-term value investment rather than a short-term speculation. Market stability may be improving as a result of investors investing for long-term holdings.

Future Prospects and Challenges

We expect that traditional financial institutions will continue to enter the crypto asset market in earnest, as exemplified by Schwab's entry. This is expected to contribute to increased market liquidity and price stabilization. However, as institutional investors continue to enter the market, the nature of the market may change.

The shift from a traditional retail investor-centered market to one in which institutional investors have a strong influence may lead to changes in price fluctuation patterns. This is not necessarily a bad thing, but market participants will need to adapt to the new environment.

While the improved regulatory environment in the U.S. is a welcome development, globally there is still some way to go. European and Asian countries are also in the process of developing regulatory frameworks that are tailored to the realities of their respective regions. This process may result in regulatory disparities between regions, which may pose a new challenge for crypto assets in the global market.

On the other hand, the clarification of regulations has certainly contributed to improving the health of the market. Eliminating illegal activities and strengthening investor protection are essential elements for the long-term development of the market.

Technological innovation continues, as seen in the development of ethereum's Layer 2 solution. These technological improvements have increased scalability, reduced costs, and increased utility. It is expected that the development of more efficient and easier-to-use blockchain technologies will continue.

However, it is also expected that the pace of technological innovation will be too fast for regulations and markets to keep up. Balanced development is important and will require ongoing dialogue among the parties involved.

The importance of risk management needs to be reaffirmed in these times of market buoyancy. The potential for sharp price volatility, as exemplified by the risk of long squeezes, is always present. Investors should be mindful of appropriate risk diversification and capital management.

In addition, crypto asset markets still have characteristics of high volatility compared to traditional financial markets. It is essential to fully understand this point and invest according to one's own risk tolerance.

Summary

A series of symbolic events have been taking place that indicate the maturation of the crypto asset market, including Bitcoin reaching a realized market capitalization of $1 trillion, large inflows into the Ethereum ETF, XRP reaching its highest price in 7.5 years, and an improved regulatory environment in the US.

The full-scale participation of institutional investors in the market, as represented by Schwab's entry, indicates that crypto assets are changing their character from speculative to investment assets. At the same time, the clarification of the regulatory environment is creating an environment in which more investors can safely participate in the market.

However, it is also important to remember that there are always risks behind favorable market conditions. There are still many issues to be resolved, such as the risk of long squeezes, technical challenges, and the complexity of regulatory compliance.

In the future, the crypto asset market is expected to continue to provide unique value while deepening its integration with the conventional financial system. It will be important for market participants to take a long-term perspective while adapting to the various changes that will occur in this process. As a new chapter of the crypto asset market is beginning, all parties involved are expected to contribute to the development of the market with a constructive attitude.

Disclaimer
This article is for informational purposes only and is not a solicitation to invest. Crypto assets are risky and you should check the latest information at your own risk.