Ethereum’s native currency, Ethher (ETH), did not start in 2025 in the best way.
One sample is that the second most valuable cryptocurrency in the market ended the first quarter of the year with a loss of 45%.
It’s the third time in its history ETH closes the first one – first graders are in red. According to Coinglass Data, a data analysis company On-chainthis occurred in 2018 (-46.61%) and 2022 (-10.75%).
However, this doesn’t end here. The bearish trend becomes even deeper if it takes it into consideration Ethereum’s traditional currency advantage fell to 7%its historic smallest.
At the time of publication of this memo, ETH control was 7.32%.
Control is an important indicator. This is because it refers to the percentage representing the ETH market capitalization in relation to the total capitalization of the cryptocurrency market.
The fact that it touched on the historic minimum is that the proportion of ETH in the market is It fell against Bitcoin (BTC) and other cryptocurrencies.
Currently, the ETH price is $1,700, 65% below its record maximum (ATH).
To understand why this fall, we need to investigate the multiple crises experienced by the ecosystem created by Vitalik Buterin.
As Cryptootics reports, one of the problems occurred after Dencun activation, causing the layer 2 (L2) network to grow in Ethereum.
Before continuing, it is important to make it clear that Dencun has reorganized the way in which data on the Ethereum main network is managed. This update will reduce L2 costs as basic, enthusiasm, optimism, arbitra, and facilitate the publication of transaction lots.
This is followed by a reduction in the use of ETH for committee payments, as many of the transactions previously made on the main network take place outside of it. As a result, demand declined, which negatively affected the price of assets.
The Ethereum problem doesn’t end here. This means that ecosystems have been facing inflation trends since February. It was simply said, More tokens are released than they burn.
From the September 2022 merge to April 2025, approximately 2 million ether was burned, and over 2.1 million were issued to compensate for the verification equipment.
But why does this happen? Because the main network has low activity, ETH combustion depends on the rate generated by the transaction.
Activities at Ethereum have been maintained since April 2024, with token burning reduced, according to ultrasound gold. Meanwhile, validator emissions have not been changed, creating a net increase in supply.
The next graphic on the Grow the Pie site has been observed since April 2024 that there are a number of transactions (blue lines in the next graphic) and arbitrum (green lines). It surpasses what was recorded in the main Ethereum chain (Gray line).
Increased ETH emissions; If you don’t have greater demand, you may weaken your value. Furthermore, this affects trust in the assets, and while validators will benefit in the short term, sustained price drops will also reduce revenues.
And if readers think these signs are not enough to confirm that Ethereum is experiencing complex moments, here is another obvious fact: The capital letters of the ERC-20 token exceed ETH.
The ecosystem is worth $473,000 million. Of that total, $207,630 million corresponds to ETH, which amounts to $2549.8 million for ERC-20 tokens and $12,660 million for mysterious tokens (NFTs).
The light at the edge of the tunnel
Christine Kim, Cryptocurrency Market analyst at Galaxy, said despite this complicated moment. The network remains the most “reliable and scalable” To maintain the growth of Defi, NFT applications, video games and decentralized social networks.
In her paper, experts say that Ethereum’s salvation depends on the greater use of L1. To do this, he proposes, “New users in the chain buying assets called ETH, and carrying L2 committees and revenues to Ethereum L1 is their stagnant network.”
Trader Mandela Ams believes that staking integration into ether-based ETFs will be a good-priced driver. Companies such as Fidelity and 21Shares have proposed to include this option in their funds.
It is worth remembering that Ethereum operates under a Proof of Participation Mechanism (POS), allowing investors to block ETH and earn returns through staking.
Finally, Don’t lose sight of the fact that it is the size of an Ethereum Horizon.
As reported by Cryptonotics, the update is scheduled for April 30th and promises to be one of the most important improvements in terms of scalability, efficiency, user experience and staking.
It will take time to see if these factors are sufficient to allow the ether to shine again on the market.
