Ethereum Plunges Amid market Uncertainty, Faces Stiff Competition
Ethereum, the world’s second-largest cryptocurrency, is facing significant headwinds,
experiencing a sharp decline in value as the start of 2025. While Bitcoin has
maintained its position due to consistent ETF inflows,Ethereum has seen its value
plummet by over 50% this year,making it the weakest performer among the top 10
cryptocurrencies.
The first quarter of 2025 proved especially challenging for Ethereum investors. The
cryptocurrency’s value decreased by 44%, missing the typical bullish trend observed
during this period. The price bottomed out at $1,400, a level not seen in over a year.
The reasons for Ethereum’s decline are multifaceted:
Markus van de Weyer, Managing Director at alpha beta asset management, noted that
Bitcoin has benefited from robust capital inflows through U.S.spot ETFs and its
perception as “digital gold.” He added, “Bitcoin’s narrative, especially in the phase
of uncertainty, has been much more suitable since Trump has been taking office than
that of Ethereum.”
beyond immediate challenges, Ethereum continues to grapple with underlying structural
problems. Despite the introduction of numerous Layer 2 solutions, transaction fees
(gas fees) on the main network remain high, deterring potential users.
From a technical chart outlook, the situation is also precarious. If the $2,000 mark
cannot be sustained, further sell-offs are likely. Some market analysts even suggest
that prices could fall below $1,000 if the negative trend persists.
However,there have been some positive signs. On April 23, 2025, Ethereum saw a nearly
15% increase, reaching $1,820 and regaining some market share. Van de Weyer commented,
“The rapid increase in price at Bitcoin also ensured rapidly rising courses in the rest
of the cryptoma market. In particular, ‘bombed’ token such as ether were able to benefit
massively and listed double -digit percentage course growth”.
On Thursday, April 24, the price declined again. Looking ahead, technical upgrades and
better integration of Layer 2 solutions could enhance the network’s appeal. Oliver
Schäfer, Head of Germany at 21Shares, stated, “on the one hand, the network is
technologically strong, in particular due to the progress in layer 2 scaling solutions
and the role as a backbone of the defi economy. Conversely, Ethereum was recently
affected by regulatory uncertainties, especially regarding stacking. This
uncertainty led to reluctance to US investors and, in combination with profit from
winning, caused increased volatility after the strong start of the year.”
the appointment of Paul Atkins as the new SEC chairman has brought about changes in the
regulatory landscape. Schäfer believes this presents an opportunity: “With Paul Atkins
as a new SEC boss, hope germinates: The markets expect a more innovation-friendly
regulation. If the SEC Ethereum-Staking ETFs allow in 2025.”
Van de Weyer is also optimistic about the near future: “The upgrade of the blockchain is
pending in a few days and should eliminate a lot of uncertainties. The upcoming
crypto-friendly regulation in the USA should create a significantly better atmosphere,
especially in the Altcoins market.”
The coming months will be crucial in determining whether Ethereum can maintain its
position as the second-largest cryptocurrency. While Bitcoin has solidified its status
as digital gold, Ethereum must defend its role as a technological foundation for
decentralized applications against increasing competition.The forthcoming upgrades and
regulatory developments will be pivotal.
