The ETH/BTC ratio has hit a five-year low. Legacy ecosystems are migrating, and new narratives remain elusive. Ethereum finds itself caught between technological upgrades and value dilution. This analysis isn’t about sentiment—it’s about strategic judgment. Is ETH still worth holding? What are the bulls, bears, and neutral observers really betting on? Let’s break it down.
The Bull Case for Ethereum: Foundations, Innovation, and Macro Tailwinds
Despite lackluster price action, supporters of Ethereum believe its long-term value is quietly compounding. Three core pillars underpin the bullish thesis: ecosystem resilience, ongoing technical innovation, and favorable macro conditions.
1. Ethereum Remains the Backbone of Web3 Infrastructure
Ethereum continues to dominate as the foundational layer for major crypto trends—stablecoins, tokenized assets, and AI agents. Industry experts like Matt Hougan, Chief Investment Officer at Valkyrie, argue that as long as Ethereum maintains its institutional credibility while improving user experience via Layer 2s, its long-term outlook remains strong.
Saul Rejwan, Executive Partner at Masterkey, believes Ethereum will be among the first to benefit from regulatory easing, particularly in DeFi and DePIN (Decentralized Physical Infrastructure Networks). Even amid short-term skepticism, many analysts agree that Ethereum’s ecosystem inertia and systemic advantages remain unmatched.
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2. Technical Upgrades Unlock Structural Advantages
The upcoming Prague/Electra upgrades promise significant improvements in scalability and efficiency. With enhanced Rollup performance, Ethereum is set to become faster, cheaper, and more accessible. Lower gas fees could drive user re-engagement and reinforce demand for ETH as a transactional asset.
Analyst @binji_x describes this as the early emergence of the “Ethereum Superchain”—a unified network of interoperable Layer 2s that could redefine growth potential across the ecosystem.
3. Strategic Shift: From Tech-Driven to Capital-Optimized
Ethereum is undergoing a structural evolution. The Pectra upgrade aims to refine ETH’s utility, while cross-chain solutions and oracle integrations are strengthening its role in price discovery and capital allocation. This shift reflects a broader effort to rebalance power within the ecosystem—toward capital efficiency and governance clarity.
Though these changes won’t immediately impact price, they signal a deliberate course correction with long-term viability in mind.
4. Market Sentiment: Is ETH Underpriced?
Prominent crypto traders are sounding the alarm on undervaluation. Analyst @rovercrc and BitMEX co-founder @CryptoHayes have both argued that ETH is priced too conservatively relative to its fundamentals. Hayes even predicts ETH could outperform Solana and reach $5,000 first—a bold claim that underscores growing confidence among professional traders.
5. Macro Liquidity: The Missing Catalyst
Many overlook the broader economic context. According to @0xVeryBigOrange, Ethereum’s stagnation isn’t due to weak fundamentals but rather the absence of macro liquidity expansion. Once central banks ease monetary policy—potentially in late 2025—the floodgates could open for risk assets like ETH.
6. Bull Market Rotation Potential
ETH hasn’t rallied—not because it can’t, but because the rotation hasn’t reached it yet. With potential rate cuts, improving ETF sentiment, and strong DeFi fundamentals, Ethereum is well-positioned to move from the sidelines back into the spotlight.
Price projections vary: DigitalCoinPrice forecasts a possible $7,000 by year-end under optimistic conditions, with long-term targets approaching **$47,000 by 2030**.
7. TVL Leadership and Capital Concentration
Ethereum still commands over $498.5 billion in Total Value Locked (TVL)—more than half of all DeFi value. While chains like Solana and Tron attract attention with speed and low fees, Ethereum remains the most trusted repository for capital in decentralized finance.
8. Superior Supply Economics vs. Bitcoin
Unlike Bitcoin’s fixed inflation rate of ~0.83%, Ethereum’s annual issuance stands at just 0.5%, making it more deflationary under certain conditions. This favorable supply model enhances scarcity and long-term holding appeal.
9. Developer Dominance
Electric Capital’s annual report reveals that Ethereum hosts 65% of global blockchain developer activity, with over 6,200 monthly active developers—and Layer 2 development growing at 67% year-over-year. Developer mindshare remains firmly anchored in the Ethereum ecosystem.
10. Governance Reform Boosts Confidence
Vitalik Buterin’s announcement to restructure the Ethereum Foundation signals a push for faster decision-making and greater transparency. Improved governance strengthens investor trust in Ethereum as a sustainable, evolving protocol.
The Bear Case: Erosion of Faith, Value Leakage, and Strategic Drift
Critics argue that Ethereum is losing relevance across key dimensions: growth, narrative control, user acquisition, and token utility.
1. Institutional Caution Suggests Further Downside
Analyst @jason_chen998 contends that Ethereum’s fundamentals have weakened. While staked ETH ETFs offer some upside, major institutions like BlackRock haven’t entered aggressively—suggesting they may be waiting for lower prices. This implies ETH might not have bottomed yet.
2. Lack of Growth Momentum
@Loki_Zeng points out that Ethereum’s ecosystem slowed dramatically in early 2025. Key sectors—DeFi, NFTs, Layer 2s—showed stagnation, while new trends like AI and memecoins gained traction elsewhere. Even staking yields failed to attract large-scale capital due to high costs and low returns.
3. RWA Hype Fizzling Out
Though Ethereum was once seen as the ideal base layer for Real-World Assets (RWA), doubts are mounting. Concerns over price volatility and PoS-related settlement risks undermine its credibility as a secure settlement layer for traditional finance assets.
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4. Stagnant User Growth
According to @wsy2021111 from PANewsCN, Ethereum’s mainnet user growth has plateaued since 2024. New users increasingly choose Layer 2s or alternative L1s like Solana for better speed and lower fees. Ethereum risks becoming a “whale-only network”—dominated by large holders but losing retail relevance.
5. Supply Inflation Returns
With declining transaction volume, daily ETH burn rates have dropped to historic lows. As a result, net supply is now increasing by approximately 945,000 ETH per year (0.76%), reversing earlier deflationary trends.
6. ETH/BTC Ratio Hits Five-Year Low
On March 31, ETH/BTC fell to 0.02193, its lowest level in five years. Amid Bitcoin’s halving rally and momentum in newer blockchains, Ethereum has become one of the weakest-performing blue-chip assets—raising concerns about capital flight.
7. Competition Heats Up
Solana’s fast, low-cost environment has captured developer imagination and user attention. Chains like Base, Sui, and Aptos are gaining traction with younger projects and communities. Ethereum’s mainnet increasingly feels like a legacy platform—reliable but less innovative.
8. Does Scalability Harm Token Value?
Investor John Pfeffer argues that Layer 2 scaling benefits users but harms ETH’s value capture. By reducing congestion and gas fees on the main chain, upgrades may actually decrease transactional demand for ETH—a structural paradox.
9. Core Applications May Leave
Rumors in late 2024 suggested Uniswap, responsible for over 14% of Ethereum’s gas fees, might launch its own chain. Such a move would not only cut revenue but also reduce one of ETH’s primary burn mechanisms—posing a serious threat to economic sustainability.
10. Governance Trust Erosion
Reports of the Ethereum Foundation selling ETH near market highs sparked accusations of insider behavior. Combined with slow progress on scalability and unclear long-term vision, community trust in governance has waned.
11. Internal Strategic Disagreements
Public disagreements between key figures—like Base lead Jesse Pollak and core developer Dankrad Feist—over the balance between mainnet and Layer 2 development reveal deeper strategic confusion. Without clear direction, execution risks increase.
So, What Should You Do?
The answer depends on your investment horizon and risk tolerance.
1. Long-Term Holders: Accumulate During Uncertainty
If you believe Ethereum remains the core infrastructure layer for Web3—with unmatched developer support, DeFi depth, and technological evolution—then current weakness may present a buying opportunity. As new narratives like DePIN, AI agents, and matured RWA integrations emerge, Ethereum is likely to remain central.
2. Short-Term Traders: Stay Flexible
Given ongoing competitive pressures and unresolved value capture issues, aggressive exposure may be premature. Consider reducing position size, maintaining a core holding, and reallocating part of your portfolio to higher-momentum assets until ETH shows clearer signs of recovery.
3. Skeptics: Monitor Key Indicators
If you’re uncertain about Ethereum’s roadmap or execution ability, adopt a wait-and-see approach. Watch metrics like daily active addresses, L2 adoption, burn rate trends, and governance developments. Re-enter only when fundamental improvements become evident.
Frequently Asked Questions (FAQ)
Q: Is Ethereum still the leader in DeFi?
A: Yes—Ethereum holds over half of the total value locked (TVL) in decentralized finance, making it the dominant platform despite growing competition.
Q: Can ETH become deflationary again?
A: Yes—if network activity increases and gas fees rise, the EIP-1559 burn mechanism could once again outpace new issuance, leading to net deflation.
Q: Why is ETH/BTC at a five-year low?
A: Bitcoin’s halving cycle has driven capital into BTC first; meanwhile, newer chains have outperformed ETH in speed and innovation perception—delaying its rotation into favor.
Q: Does Layer 2 hurt Ethereum’s value?
A: It’s debated. While L2s improve scalability, they reduce direct fee revenue to the mainnet—potentially weakening short-term value accrual unless new utility layers emerge.
Q: Are staked ETH ETFs bullish for price?
A: Potentially yes—they could bring institutional liquidity and simplify exposure to staking rewards, increasing demand if approved and widely adopted.
Q: Should I sell ETH now?
A: That depends on your goals. Long-term believers may hold or accumulate; short-term traders might rotate into stronger performers until momentum shifts back to ETH.
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