It's hard to express this, the recent trend of Ethereum is concerning, the ETH/BTC exchange rate has hit a five-year low, and the new narrative has yet to arrive, deeply mired in the quagmire of technical upgrades and value dilution, making it difficult to move forward. Today, let's take a good look at why Ethereum is performing so poorly this time around.#ETH
Ethereum has long played the role of an innovation pioneer in the development history of blockchain technology. Looking back, the crazy wave of ICOs in 2017 and the explosive growth of DeFi in 2020 injected continuous vitality into the Ethereum ecosystem, igniting the market completely, with countless people diving in. However, during this bull market, Ethereum has fallen into a bottleneck of innovation, with no standout applications to showcase. It's important to note that in the crypto world, a new narrative is like a powerful magnet, attracting new funds and users in droves. Ethereum lacks this crucial element, leading to a significant decline in ETH's market performance.
From a technical perspective, Ethereum's upgrade process has not stopped, but it has lost its grip on value capture. The supply of ETH continues to expand, and the once-anticipated deflationary vision has completely collapsed. Currently, on-chain activities are becoming increasingly quiet, with Gas burning sharply reduced, yet staking rewards continue to be issued as usual. As a result, the actual value of ETH is continuously shrinking. Users holding ETH watch helplessly as their account assets lose actual value, making it understandable that their confidence would be shaken and selling behavior would follow.
Competition in the public chain arena has become intense. Solana, with its high throughput and low-cost advantages, is rapidly expanding in the market, aggressively taking a significant slice of the pie from Ethereum. Moreover, both new and old public chains are vying for dominance, further weakening Ethereum's competitive position. For example, in the first quarter of 2025, Solana's NFT trading volume grew by 12% against the trend, while Ethereum's trading volume plummeted during the same period. This stark contrast highlights the severe competitive pressure facing Ethereum.
Once, the Ethereum ecosystem was like a myth, as the birthplace of decentralized finance, nurturing many star projects such as Uniswap, Aave, and CryptoPunks, each capable of pushing market enthusiasm to new heights. However, this round of DeFi enthusiasm has gradually dissipated, and the NFT market has also fallen silent, with emerging blockchain games and AI-related innovative projects appearing more in the ecosystems of competitors like Solana and TON. Ethereum is not only struggling to achieve original breakthroughs but even when referencing the successful cases of others, the results have been unsatisfactory. The stagnation of innovation raises doubts about whether its ecosystem can recreate past glories.
Looking at the macro environment, the current global economic situation is turbulent, and market sentiment leans towards risk aversion. Bitcoin, as the 'digital gold' of cryptocurrencies, is favored in this situation, with large amounts of capital flowing in to seek safety. However, Ethereum has failed to demonstrate sufficient attractiveness during this round of market fluctuations. One of the major global banks, Standard Chartered, significantly lowered its ETH price target from $10,000 to $4,000 at the end of last year, clearly reflecting market concerns about Ethereum's future landscape, especially from the competition of Layer 2 solutions and rival blockchain networks.
The poor performance of Ethereum this time around is primarily due to the lack of a new narrative, which fails to attract new funds and users, leading to weak market performance. Coupled with issues such as ecosystem shrinkage, stagnation of innovation, technical upgrades, and value dilution, it can be described as adding insult to injury. It's better to pay more attention to the public chains that are performing relatively well in the market: BNB, SOL, and SUI. Currently, the ecosystems on the BNB and SOL chains are already quite mature, and if one wants to achieve high returns, they must keep a close eye on the ecosystem of the dark horse SUI chain.$SUI #CETUS
