Ethereum’s return movement and stablecoin flows will gain momentum as they return to L1

TLDR:

Ethereum movement and stability coin balances from Layer 2 networks back to the base layer
Stablecoin supply and tokenized assets on Ethereum are approaching previous all-time highs.
Ethereum's high value of execution density and integration continues to attract transactions on-chain.
ETH has surpassed major Layer 2 benchmarks since October 2025, indicating renewed market strength.

Ethereum comeback narratives are gaining attention as new information suggests renewed activity on the network. Insights shared by Coinbase Institutional indicate a measurable change in user behavior and capital flows.

Stablecoin balances and tokenized assets on Ethereum are approaching historic highs. At the same time, ETH has outperformed major Layer 2 tokens since October 2025, suggesting a shift in market structure.

Movement back to the Ethereum base layer

Recent observations show that users are slowly returning to the Ethereum mainnet. Coinbase Institutional reports that both activity levels and stable coin balances have returned to Layer 1. This marks a change from previous periods when Layer 2 solutions accounted for a significant share of transactions.

The same update indicated that stablecoin supply on Ethereum is approaching record levels. Token asset prices are rising to all-time highs. These moves indicate an increased reliance on Ethereum for settlement and liquidity functions.

Metrics that track organic activity support this trend. Execution density on Ethereum remains strong, with higher economic value at a given block space. This shows that consumers continue to prioritize efficiency and depth over low transaction costs.

Coinbase has stated that institutional ETH will outperform the main layer 2 tokens from October 2025. This relative strength is associated with increasing chain motion and sustained fluid flow.

The data was shared via the official X post, which framed the discussion around Ethereum's evolving role.

The strength of the infrastructure supports the return narrative

Ethereum integration continues to serve as a major advantage in the current market. Applications built on the network communicate seamlessly, allowing complex financial transactions across protocols. This framework supports the scalable use of stablecoins and tokenized assets.

Enforcement density is another defining factor. Ethereum processes high-value transactions in the core layer while maintaining efficiency despite its high cost. In contrast, Layer 2 networks distribute traffic across multiple chains, often focusing on cost reduction.

Coinbase's institutional reform also signaled continued developments in Stablecoin regulations. These changes are drawing attention to the infrastructure that supports digital assets. Ethereum remains the primary base layer for stablecoins due to its liquidity depth and established ecosystem.

At the same time, layer 2 solutions continue to play an additional role. In particular, they offer large scale and low transaction costs to retail users.

However, recent data suggests that Ethereum is regaining leverage in areas that require capital concentration.

Ethereum's comeback narrative continues to evolve as market dynamics change. The increased activity, growing stable coin scales and ETH's relative performance indicate a renewed focus on the base layer.

As things evolve, the connection between Layer 1 and Layer 2 is central to Ethereum's positioning.