In 2025, Ethereum's price plummeted by 47%, leading many investors to question whether now is the time to buy or sell. As of the writing of this article, the trading price of ETH is approximately $1,823.12, with a slight rebound of 0.83% over the past day. Despite Ethereum's market capitalization reaching $220.49 billion, it still faces significant challenges.
Risks of Ethereum's price drop and market uncertainty: Should you invest now?
The decline in active wallets signals a problem
Recent data shows that the number of active wallet addresses for Ethereum dropped to about 13.9 million in March, a decrease of 1.5 million compared to the same period last year. This key indicator suggests that while Ethereum's network status is solid, users are gradually drifting away from it.
Cryptocurrency analyst Alex Carchidi clearly states:
Ethereum is the second-largest cryptocurrency, with a market capitalization close to $220 billion. This means that if its ecosystem is healthy, there should be a large number of users interacting with its blockchain through crypto wallets.
Currently, competitors have higher user engagement than NanoX. Solana has 68 million active wallets, but its cryptocurrency market cap is as high as $78 billion; while Sui has 38 million active addresses, but a market cap of only $12 billion.
Competitors are gradually rising
Ethereum's price has fallen, while its main competitors Solana, Cardano, Avalanche, and Sui are actively expanding their market dominance. These competitive cryptocurrencies have now entered the top 20 and have surpassed ETH this year.
Charles Hoskinson, founder of Cardano and former co-founder of Ethereum, expressed concerns:
"Ethereum doesn't have much time left; it is about to become the next MySpace or Blackberry."
Uncertainty in leadership
While Ethereum's price is declining, internal management issues within the network have also arisen. There are rumors that Vitalik Buterin will resign from his leadership position at the Ethereum Foundation during a comprehensive restructuring in early 2025. The ETH roadmap has also become uncertain due to conflicts in the development team's publicly stated priority needs.
Support from the Trump administration
Nevertheless, despite the current context of Ethereum's price decline, there are still some positive factors. The Trump administration has established Ethereum as a core technology for blockchain development in the U.S. through a digital asset reserve program. Ethereum is an investment of World Liberty Financial, which has ties to the Trump family.
Without confirmation of a new U.S. Treasury bond purchase plan, market price levels will not receive any boost.
Investment outlook
Ethereum currently has a circulation of 120.72 million ETH, with a daily trading volume of 16.71 billion US dollars. After the price drop, trading volume has rebounded, with daily trading volume increasing by 54.93%. Currently, the ratio of market trading volume to market capitalization is 7.58%, indicating moderate liquidity.
Financial analyst Dominic Basulto warns that:
The valuation of digital assets should be based on their future growth projections, not past honors or performance. There are now too many competitors, and Ethereum has begun to fall behind its largest rivals.
The analysis of Ethereum's price decline reminds investors to be cautious. Despite its historical significance, the decline in various metrics, fierce competition, and questions about leadership make the investment outlook full of uncertainty. In the coming months, we will see whether this 47% drop is a buying opportunity or the beginning of a larger decline for ETH.
In 2025, Ethereum's price plummeted by 47%, leading many investors to question whether now is the time to buy or sell. As of the writing of this article, the trading price of ETH is approximately $1,823.12, with a slight rebound of 0.83% over the past day. Despite Ethereum's market capitalization reaching $220.49 billion, it still faces significant challenges.
Risks of Ethereum's price drop and market uncertainty: Should you invest now?
The decline in active wallets signals a problem
Recent data shows that the number of active wallet addresses for Ethereum dropped to about 13.9 million in March, a decrease of 1.5 million compared to the same period last year. This key indicator suggests that while Ethereum's network status is solid, users are gradually drifting away from it.
Cryptocurrency analyst Alex Carchidi clearly states:
Ethereum is the second-largest cryptocurrency, with a market capitalization close to $220 billion. This means that if its ecosystem is healthy, there should be a large number of users interacting with its blockchain through crypto wallets.
Currently, competitors have higher user engagement than NanoX. Solana has 68 million active wallets, but its cryptocurrency market cap is as high as $78 billion; while Sui has 38 million active addresses, but a market cap of only $12 billion.
Competitors are gradually rising
Ethereum's price has fallen, while its main competitors Solana, Cardano, Avalanche, and Sui are actively expanding their market dominance. These competitive cryptocurrencies have now entered the top 20 and have surpassed ETH this year.
Charles Hoskinson, founder of Cardano and former co-founder of Ethereum, expressed concerns:
"Ethereum doesn't have much time left; it is about to become the next MySpace or Blackberry."
Uncertainty in leadership
While Ethereum's price is declining, internal management issues within the network have also arisen. There are rumors that Vitalik Buterin will resign from his leadership position at the Ethereum Foundation during a comprehensive restructuring in early 2025. The ETH roadmap has also become uncertain due to conflicts in the development team's publicly stated priority needs.
Support from the Trump administration
Nevertheless, despite the current context of Ethereum's price decline, there are still some positive factors. The Trump administration has established Ethereum as a core technology for blockchain development in the U.S. through a digital asset reserve program. Ethereum is an investment of World Liberty Financial, which has ties to the Trump family. Without confirmation of a new U.S. Treasury bond purchase plan, market price levels will not receive any boost.
Investment outlook
Ethereum currently has a circulation of 120.72 million ETH, with a daily trading volume of 16.71 billion US dollars. After the price drop, trading volume has rebounded, with daily trading volume increasing by 54.93%. Currently, the ratio of market trading volume to market capitalization is 7.58%, indicating moderate liquidity.
Financial analyst Dominic Basulto warns that:
The valuation of digital assets should be based on their future growth projections, not past honors or performance. There are now too many competitors, and Ethereum has begun to fall behind its largest rivals.
The analysis of Ethereum's price decline reminds investors to be cautious. Despite its historical significance, the decline in various metrics, fierce competition, and questions about leadership make the investment outlook full of uncertainty. In the coming months, we will see whether this 47% drop is a buying opportunity or the beginning of a larger decline for ETH.
