Ethereum trading volume hits year-to-date high amid SEC pledge controversy

Market sentiment improves: ETH investors continue to be bullish

The Ethereum network has experienced a rare period of activity after the SEC released new guidance around Liquid Staking.
According to Dune Analytics , the current amount of Ethereum staked has exceeded 36 million ETH, representing nearly 30% of the circulating supply. This indicates that a large amount of ETH is locked in smart contracts, indicating that investors are confident and are choosing to hold onto their holdings to earn staking returns rather than selling for cash in the short term.

Meanwhile, Nansen data shows that Ethereum's total network transaction volume hit a new high for the year, with market enthusiasm surging. CryptoQuant analysts noted that over 500,000 ETH were newly staked in the first half of June alone, valued at approximately $1.8 billion.

Regulators release signals, but SEC's divergent stance draws attention

In early August 2025, the U.S. SEC's Division of Corporation Finance issued a statement stating that **Liquidity Staking Tokens (LST)** are not securities under certain conditions, sending a regulatory signal that is favorable to the DeFi industry.

Alluvial CEO Mara Schmiedt said the guidance will allow institutions to “more boldly integrate LST and create a richer secondary market for staked assets.” (Source: Cointelegraph)

However, there is disagreement within the SEC. Commissioner Caroline Crenshaw expressed skepticism, stating that the statement is "laden with assumptions and lacks a realistic basis," arguing that its legal applicability is very limited and represents only the views of one department.

In response, crypto-friendly commissioner Hester Peirce (known as "Crypto Mom") expressed support, emphasizing that the SEC's move is a clarification of the industry and a positive signal of regulatory adaptation to innovation.

One-year Ethereum network transaction chart. Source: Nansen

DeFi is still in a regulatory gray area, and the regulatory game continues

Although LST has received phased recognition, the entire DeFi industry is still in a legal gray area globally.

• In the United States, the CLARITY Act is still under review and attempts to exempt DeFi protocols from following the traditional securities framework.

• EU MiCA does not cover DeFi regulation, but it may be taken forward as a priority in 2026.

At the same time, the Ethereum ecosystem performed strongly:

• The number of on-chain addresses with no sales history has increased, cumulatively holding nearly 23 million ETH, worth approximately US$82.6 billion (Source: CryptoQuant).

• The number of validators continues to grow, and the network security and decentralization are improved.

Steadily optimistic, but wary of regulatory implementation discrepancies

The market is currently bullish on Ethereum and DeFi, with funds continuing to flow into the staking sector. However, investors should note the following:

• Although LST has received positive statements, it does not mean that it is fully legalized, and there are still gaps in policies between different countries;

• The US SEC has not yet expressed its position on the inclusion of pledge functionality in ETFs, and further disruptions may occur in the short term.

• In the medium and long term, ETH lock-up reduces selling pressure and the fundamentals are positive, but attention should be paid to the actual implementation of policies.

Ethereum stands at the starting point of the dual dividends of "softening regulations" and "technological upgrades." Can this lead to a new round of revaluation? Investors may wish to pay more attention to policy developments and grasp the rhythm of pledge asset allocation.

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