Ethereum has recently experienced a severe downturn, precipitated by retaliatory tariff policies among nations.
The Drastic Decline of ETH Caused Widespread Panic
Specifically, Ethereum ETH saw its value plummet to a low of $1,385, as reflected in the exchange rate displayed on Binance. This figure represents a record low over the past two years, spanning from 2024 to the present.
Learn more: What Is Ethereum?
A pessimistic response is understandably prevalent among investors in the leading Layer 1 platform within the cryptocurrency market. At the time of writing, ETH is priced at $1,449, placing it a mere $550 above the trough of the most recent bear market. Meanwhile, Ethereum’s perspective of reclaiming its previous all-time high (ATH) of $4,878 appears increasingly implausible.
Notably, the Ethereum ecosystem has also demonstrated vulnerability in the face of broader market pressures. Uniswap UNI, the largest decentralized exchange (DEX) within Ethereum’s ecosystem, recorded a 10% decline today. Similarly, other projects within the DeFi sector, such as Ethena ENA, which dropped by 10%, alongside Aave AAVE and EigenLayer EIGEN, which also experienced significant declines of up to 9%, reflect the pervasive weakness across the ecosystem.
EigenLayer and Uniswap downed sharply today – Source: CoinGecko
Other narratives on Ethereum all point to a similar downfall:
The “Sign of life” is Blurring
ETH ETFs Experience Declining Purchasing Power
Since late February, ETH ETFs have predominantly registered significant outflows, indicating a diminishing investor appetite. Concurrently, this trend suggests a relatively subdued long-term growth outlook for Ether.
By contrast, Bitcoin even witnessed a price drop due to a general commercial clash recently, still marked by the purchasing from multiple ETFs as well as venture capital.
ETH ETFs Outflow continuously – Source: Coinglass
Poor DEX and On-chain Activities
Gas fees on Ethereum, which have remained subdued since the beginning of 2025, indicate a lack of developmental momentum and the absence of a compelling narrative capable of elevating the on-chain ecosystem on this Layer 1 blockchain. This situation has significantly underutilized Layer 2 scaling solutions for the Ethereum blockchain.
In previous years, even during periods of substantial cryptocurrency market downturns such as 2022–2023, certain categories like restaking, liquid staking, and fan tokens were robust enough to drive market activity and bolster the Ethereum ecosystem. However, these waves of innovation have now dwindled considerably. Even the AI sector, led by FET, has failed to stand out prominently.
The lackluster on-chain activity has also impacted the inflation dynamics of ETH. Following The Merge, a portion of transaction fees is burned, meaning that the more robust the on-chain activity, the greater the amount of ETH-denominated fees burned. In other words, when the amount of ETH burned exceeds the amount of newly issued ETH, inflation can be avoided.
Ethereum faces serious inflation – Source: Dune Analytics
Nevertheless, due to the persistently low on-chain activity on Ethereum, the blockchain has slipped into a prolonged inflationary state without an effective remedy. Meanwhile, the upcoming Pectra upgrade does not appear to prioritize increasing demand for Ether utilization, in stark contrast to initiatives like Berachain’s Proof of Liquidity program.
Learn more: Ethereum Sets Pectra Mainnet Launch for May 7
The WLFI Fund, Associated with Donald Trump, Has Recently Sold ETH at a Loss
According to Arkham, a cryptocurrency wallet potentially associated with World Liberty Finance (WLFI) liquidated 5,471 ETH, valued at $8.01 million, at a price of $1,465 per coin. The entity had previously invested around $210 million to acquire 67,498 ETH at an average cost of $3,259, resulting in a current unrealized loss of roughly $125 million.
Source: Arkham
