Ethereum (ETH) experienced significant price drops in early 2025.
February saw a decline of nearly 32%, followed by a 19% decrease in March.
This performance marks the start of 2025 as a period of poor performance for the cryptocurrency.
Institutional Support for Ethereum Remains Robust
Despite the recent price decreases, Ethereum maintains strong institutional backing.
Many still consider it an essential infrastructure for tokenization and the broader cryptocurrency space long-term.
Competition from Layer 1 Networks Increases
Ethereum faces growing competition from Layer 1 networks like Aptos and Sui.
These platforms are challenging Ethereum’s dominant position in the market.
Ethereum Price Trend Downward Since 2025
Ethereum’s price has followed a downward trend since the beginning of 2025.
February marked a record-low month for the asset. Is price recovery still possible?
March Price Drop Follows Worst February in Ethereum History
CoinGlass data indicates Ethereum’s price decreased by almost 19% in March.
This continues the decline that started in January.
February’s drop was even steeper, with ETH falling by nearly 32%.
This makes it the worst February on record for Ethereum.
Historical Trends Reversed in 2025
Historically, February and March typically show strong price performance for Ethereum.
In 2025, this trend reversed, and prices declined during these months.
Investor Frustration Rises Amid Price Slump
Unlike Solana (SOL), Ethereum has not experienced reputational issues.
Investors are increasingly frustrated by the continued price declines.
Ethereum’s last all-time high of $4,878 occurred on November 10, 2021.
Community Expresses Concern and Suggests Leadership Change
The ongoing price slump has raised concerns within the cryptocurrency community about Ethereum’s future.
Some community members have suggested that Vitalik Buterin should step down to revitalize the project.
Tim Delhaes, CEO and founder of Grindery, stated to Cryptonews that he remains confident in Ethereum’s long-term potential.
He acknowledged considerable short-term uncertainty and negative sentiment surrounding the platform.
Ethereum continues regular updates. The Dencun upgrade, launched in March 2024, was a significant update designed to reduce network fees, a long-standing Ethereum issue.
Dencun Upgrade’s Unintended Impact on Network Revenue
The Dencun upgrade successfully lowered transaction costs but also produced an unintended effect.
Eneko Knörr, CEO and co-founder of Stabolut explained to Cryptonews that Ethereum is experiencing an “identity crisis” beyond recent price drops.
Knörr noted that the Dencun upgrade, meant to improve scalability and reduce fees, unintentionally undermined a key factor in network valuation.
While user experience improved due to lower fees, network revenue decreased, impacting ETH’s price.
Data Confirms Revenue and Fee Decline
TokenTerminal data supports this. Ethereum’s revenue decreased by 76.6% and fees fell by 60.4% over the past 30 days.
Economic Misalignment Concerns Regarding Layer 2 Networks
Knörr also pointed to concerns about Ethereum’s economic structure, specifically regarding Layer 2 (L2) networks.
He noted “economic misalignment” as a growing concern.
Ethereum risks becoming infrastructure for a growing ecosystem without capturing value from it.
Layer 2 networks like Arbitrum, Optimism, and Base now generate more fees than Ethereum itself.
Little of this revenue supports the base layer, according to Knörr.
Layer 2 DEXs Gain Market Share
Base and Arbitrum (ARB) are also gaining market share in decentralized exchanges (DEXs).
DeFiLlama data shows they rank in the top 5 DEX blockchains, at fourth and fifth place, respectively.
Ethereum Still Leads DEX Rankings
Despite the competition, Ethereum remains the top blockchain in DEX rankings, a position previously often held by Solana due to meme coin popularity.
