Ethereum (ETH) needs three specific developments to regain momentum and challenge its previous highs, according to Joseph Chalom, CEO of Sharplink Gaming, the second-largest publicly listed holder of ETH with a treasury of 861,251 ETH valued at approximately $1.89 billion.
"One is the CLARITY Act to pass in the US," Chalom said in a Cointelegraph interview on May 16, also pointing to a revival in market risk appetite and the expansion of real-world asset (RWA) tokenization as crucial factors.
The Digital Asset Market Clarity Act (CLARITY) recently advanced from the Senate Banking Committee with a 15-9 bipartisan vote, a move aimed at providing a clear regulatory framework for digital assets in the US by defining the jurisdictions of the SEC and CFTC. Chalom noted that this legislative progress is being monitored globally. "If you go to Korea, Hong Kong, Tokyo and Singapore, they are watching really closely because they realize the US went from having a hostile stance towards crypto and digital assets to... it could become the leader again in finance," he said.
Chalom predicts the tokenized asset market could surge from its current $32 billion to $500 billion or even $1 trillion within a year, stating, "Tokenization of financial assets is where Ethereum is going to dominate." This growth, combined with regulatory clarity and a broader market recovery, could provide the impetus for ETH to move toward its previous all-time high of $4,823, set in August 2025.
Regulatory Headwinds Easing
The CLARITY Act's progress is a significant step, but it still faces hurdles. The bill will be subject to over 100 proposed amendments when it moves to the full Senate, with stablecoin yield products remaining a major point of contention. Despite the legislative process ahead, Chalom sees the bill's advancement as a primary driver for renewed confidence in the crypto sector, particularly for foundational networks like Ethereum.
A Return to Risk-On
The second condition, according to Chalom, is a broader market shift back toward risk assets. He suggests this would require a cooling of the "AI thesis" that has dominated capital allocation, alongside an easing of geopolitical tensions. A rotation of capital out of overheated tech stocks and into other sectors could benefit digital assets like Ethereum as investors seek new growth opportunities.
Real-World Assets on Ethereum
The third, and perhaps most significant, catalyst is the accelerating tokenization of real-world assets on the Ethereum network. Chalom highlighted that while the sector has grown slowly since 2017, it is now seeing major institutional adoption. JPMorgan recently filed to launch a tokenized money market fund on Ethereum, and Franklin Templeton is partnering with Ondo Finance to bring tokenized versions of its ETFs on-chain. These moves by traditional finance heavyweights lend credibility to the tokenization thesis and position Ethereum as the primary settlement layer for this burgeoning market.
This article is for informational purposes only and does not constitute investment advice.
