Although it is difficult for Ethereum to admit for investors, the data reveals a bitter truth: ETH loses both the market share and its superiority in the sector.
Three critical indicators that describe the Ethereum decline in the best way
In the last year, Bitcoin leaving Ethereum behind; Solana rose rapidly and the Layer-2 networks began to consume Ethereum’s economic advantages. Even the most loyal defenders of the Ethereum community express the problems faced by the network.
Ethereum’s founding partner Vitalik Botter, accepting the disorders in the ecosystem, announced that leadership changes will be made at the Ethereum Foundation. However, the most of the criticism of the foundation director Aya Miyaguchi’ye attacks should be alleviated, he argued. Optimism, the founding partner of Optimism, one of the Layer-2 projects, emphasizes that the community should act together to recover Ethereum.
Weakness in price performance
In the last year, Ethereum has been the lowest performance asset among large crypto currencies.
- Double Bitcoin and Solana Prices
- Dogecoin increased three times
- XRP gained five times value
- Ethereum rose only 22 %, which is quite low for the crypto market.
Last Monday, ETH price fell by 24 %to $ 2,300, but the US President Eric Trump’s son Eric Trump called for investment in Ethereum after $ 2,700.
Some analysts in the market predict that ETH may fall up to $ 2,100 in the short term. Arthur Azizov, CEO of B2BINPAY, says Ethereum still has a strong liquidity threshold at $ 2,100-2.110.
Ethereum fell to Bitcoin even further
The Ethereum community has argued that Ethereum’s market value will pass Bitcoin for years. Ethereum was expected to be more valuable with the popularity of defi and NFTs. However, the market showed the opposite:
- Aside from passing Bitcoin, Ethereum fell far behind the market leader.
- ETH/BTC price ratio has fell to the lowest level of the last four years.
While the NFT sector is largely damped, Defi is no longer only a field of Ethereum. Although Ethereum still has the biggest share in Defi, this advantage is melting rapidly. On the other hand, Bitcoin has become the favorite of corporate investors:
- Microstrategy holds Bitcoin worth $ 30 billion.
- Bitcoin ETFs in the USA reached $ 107 billion asset management, and Ethereum ETFs did not see the same interest.
Ethereum’s economic structure is weakening
One of the biggest advantages of Ethereum, the deflationist supply structure did not provide the expected benefit.
The EIP-1559 mechanism, which was initiated in August 2021, burned some of the trading fees to reduce ETH’s circulating supply. However, with the increase in the Layer-2 solutions, the economic activity on the Ethereum main network decreased, which reduced ETH burning speed.
While Ethereum’s previous economic advantages rapidly melted, competing projects continue to develop.
What kind of 2025 is waiting for ETH?
Ethereum still has a giant ecosystem of $ 75 billion, but the network is becoming increasingly cumbersome and inefficient. Developers argue that new updates, such as Uniswap V4 for Ethereum’s revival, can launch the “Defi Renaissance ..
However, market trends show that Ethereum is not as unrivaled as before. This means that radical changes in the ecosystem are inevitable.
