Unless it completely disconnects from the outside world, it’s hard not to notice that Ethereum's performance over the past few months has been quite dismal. Whether it's price, market dominance, or community sentiment—pick any one, and it's essentially at rock bottom. This once top-tier cryptocurrency seems to be on a downward trend, not even creating new highs during this bull market. However, in the past few days, it seems to be attempting a rebound. So, what caused its previous low performance? Can this little rebound help it escape the mire?
The plight of Ethereum.
Ethereum's current situation is indeed quite dire. Since December 2024, every time market sentiment worsens and the overall cryptocurrency market experiences a pullback, only Bitcoin manages to recover or even reach new highs, while Ethereum essentially fails to bounce back after a drop.
Let's take a look at the trends over the past few months:
In November 2024, the market was rising, with Bitcoin around $96,405 and Ethereum at $3,703.
By December 1, the market adjusted slightly, with Bitcoin dropping to $93,557 and Ethereum falling to $3,337. Although both eventually surged later that month, neither could hold onto their gains and quickly fell back down.
On January 1, 2025, Bitcoin's price rose slightly to $94,500, while Ethereum continued to fall to $3,298. By February 1, Bitcoin dropped to $84,381, and Ethereum fared worse, falling to $2,236. Although Bitcoin surged to $102,000 by the end of that month, Ethereum still failed to keep up, not even touching its previous high.
What’s even more absurd is that during the rebound of Bitcoin from $84,381 in February to $94,304 in April, Ethereum continued to decline without even a decent rebound. The BTC/ETH ratio has also been widening, which is quite evident from the charts.
As of now, Ethereum's price is around $2,400, which is relatively good compared to the past few months. However, it has not broken through higher price ranges. So the question arises: what exactly is happening with Ethereum? Let's clarify a few key reasons.
Bitcoin and meme coins are stealing the spotlight.
Over the past few months, the entire market's attention has been diverted to Bitcoin and meme coins. You may have heard about the U.S. government's plans to establish a Bitcoin strategic reserve, right? This news has generated quite a buzz among retail and institutional investors, with several U.S. state governments taking concrete steps to push this idea forward. States like Texas and New Hampshire have already taken action, and other states, even some countries, are following suit.
This level of 'sovereign' attention has naturally attracted a lot of large capital and institutions. For instance, Michael Saylor is back at it, with Strategy (formerly MicroStrategy) continuing to buy Bitcoin, solidifying its position as the 'publicly traded company with the most Bitcoin.' Currently, Strategy holds over 555,000 Bitcoins, accounting for a substantial portion of the total supply of 21 million.
Meanwhile, while Bitcoin dominates the headlines, meme coins have also been active. However, the awkward part is that most of these popular meme coins did not originate on the Ethereum chain. For example, the Fartcoin that exploded in popularity in 2025, with a market cap exceeding $1 billion, runs on the Solana chain. Additionally, the meme coin issuance tool PumpFun, widely used by everyone, is also part of the Solana ecosystem. You might not have noticed, but since late 2024, almost all the hottest meme coins of 2025 have come from PumpFun.
Therefore, Ethereum clearly did not keep up with this wave of enthusiasm. There has also been much less discussion about DeFi, primarily due to a lack of new breakthroughs. Overall, Ethereum is currently not at the center of any major hot topics—therefore, it lacks the momentum to drive its price up.
Liquidity has shifted to sub-networks.
Ethereum's gas fees have always been high, which is a stumbling block for its development. Worse, its network is now filled with Layer-2 networks like Polygon, Optimism, Base, Linea, and Arbitrum, all competing for Ethereum's liquidity. With stablecoins like USDC, these L2s can operate normally without much need for ETH. Not to mention, there are many things that can be done on these L2s, leading to a decline in the frequency of transactions on Ethereum's main chain. Under normal circumstances, increased on-chain usage should raise ETH demand, but the reality is not so.
Competitors have emerged.
As mentioned earlier, chains like Solana are stealing the spotlight from Ethereum. To be honest, Solana currently offers a better experience for developers and users than Ethereum. Who wouldn't want to use a faster, cheaper, and more powerful chain? According to CoinGecko's analysis of Solana, its on-chain activity is very high, which is why it continues to attract developers and retail investors. Let's look at a few key points:
More powerful and more scalable: Solana can process 3,000 transactions per second, theoretically even reaching 65,000 TPS. In contrast, Ethereum only handles 15 transactions per second, which is a significant disadvantage. Moreover, Solana has low transaction costs, making it naturally more appealing to developers.
An active and robust ecosystem: Solana provides a lot of tools, resources, and financial support, allowing developers to create projects more quickly. Similarly, Avalanche's popularity and capabilities are also on the rise. If these Layer-1 platforms continue to gain favor among institutions, they will further challenge Ethereum's position.
Additionally, platforms like Hyperliquid and Tron have made progress in perpetual contracts and stablecoins.
Institutional interest is also low.
When major global companies, big players, and even some countries are buying Bitcoin, the situation for Ethereum is much quieter. According to CoinGecko data, there are very few publicly listed companies that truly hold ETH, with a total market value of less than $500 million, while Bitcoin's market cap exceeds $50 billion.
Even the performance of the crypto ETF market shows a significant demand gap between Bitcoin and Ethereum. Bitcoin, with its first-mover advantage and universally recognized status as a 'store of value,' has attracted substantial capital. Although ETH spot ETFs have also pulled in hundreds of millions, the gap compared to BTC remains quite large.
Does Ethereum still have a chance to turn things around?
Now, if Ethereum wants to regain its market position, it needs a significant awakening to attract more investments, which could potentially send its price soaring again. As I write this, Ethereum has just completed an upgrade, which is good news, but it has not yet completely resolved its asset and data bridging issues on Layer-2. In contrast, competitors like Solana allow users to switch seamlessly between different DApps, providing a better experience.
However, this upgrade has indeed stimulated ETH prices—there was a 20% increase within 24 hours, reaching $2,400. Does this established leader still have a chance to make a comeback? We can only wait and see if this upgrade can help Ethereum get back on track.
