- ETH has declined by 47% over the past year.
- Ethereum’s poor performance has left the altcoin lagging behind BTC as it slowly lost its lead.
Since the start of 2025, Ethereum [ETH] has faced significant struggles. As such, the altcoin that was once presented as a Bitcoin [BTC] challenger is struggling to compete with smaller coins.
This poor performance has caught the attention of key stakeholders, and mainstream media. As per a recent Bloomberg report, Ethereum is facing the most challenging period as it enters its second decade of operations.
Source: Bloomberg
As such, Ethereum developers have been fleeing, early followers are angry, and the token has started lagging behind both BTC and its smaller competitors.
Although Ethereum remains the second-largest crypto with $221 billion in market cap, ETH has declined significantly. ETH has declined by over 44% YTD, dropping from $3.6k in January 2025 to $1.8k.
Source: Messari
This decline has poised the altcoin for its worst quarterly drop since the 2022 bear market. Over the past year, while BTC has surged by 30%, Ethereum has declined by 47%, and it’s slowly losing its lead over competitors.
This has resulted in its market dominance decline to 7.9% from 17% over the past year. So, its competitors have grown at a faster and sustained rate.
For instance, the number of active developers on Ethereum-related software declined by 17% in 2024. However, its close rival Solana [SOL] saw a sharp increase in active developers.
Thus, Solana has become a popular hub for memecoins with the network recording 83% year-to-year growth.
This is also witnessed against other coins, such as Ripple’s XRP. While ETH has declined over the past year, XRP has risen by 249% on its price charts, with market cap rising from $30 billion to $127 billion.
Source: Messari
With ETH’s continued poor performance, the altcoin has become highly unattractive to investors. Looking at ETH’s Sharpe ratio over the past year, it has declined to -0.69.
This implies that investment returns have not only declined, but it has become a risky investment compared to risk-free assets.
What’s happening with Ethereum?
According to key stakeholders, one of the fundamental challenges affecting Ethereum is leadership. In his analysis, Ryan Watkins noted that Ethereum’s leadership has failed to capitalize on the previous momentum.
He noted,
“It’s all about growth and leadership — If the Ethereum ecosystem kept pace with, or outpaced, its peers, none of these above would matter.”
This leadership concern was also noted by Bloomberg, blaming Ethereum’s founder Vitalik Buterin, failure to adapt to change.
Under his leadership, Ethereum remains stuck in early visions of decentralization failing to join forces with politicians, and lobby in Washington DC as other players join a pro-crypto government.
Buterin has remained critical of politicians, either endorsing them or any of them having crypto coins. This vision of a fully decentralized blockchain has left Buterin in the cold as other players join forces with governments.
What next for ETH
According to AMBCrypto’s analysis, Ethereum was facing strong downward pressure at press time. The altcoin was trading at $1839, marking a 2.11% decline over the past day.
Equally, ETH has declined by 8.39% on weekly charts, implying strong negative sentiments.
Source: Tradingview
Looking at ETH’s charts, the Stoch RSI signaled a potential continuation of this downtrend. Since making a bearish crossover five days ago, Stoch has dropped to 14.6 reflecting a strong downward momentum.
Therefore, if the external factors observed above remain unfavorable, the dip could continue. A further drop could see ETH drop to $1761. For a bullish outlook to reemerge, ETH must reclaim and hold above $2k.
