Ethereum has experienced a severe recession recently, driven by retaliatory tariff policies between countries.
The sharp drop in ETH caused widespread panic
Specifically, Ethereum eth As reflected in the exchange rate shown on Binance, its value plummeted to a low of $1,385. This number represents a record low in the past two years, from 2024 to the present.
Learn more: What is Ethereum?
Understandably, this pessimistic reaction is common among investors in the leading tier 1 platform in the cryptocurrency market. At the time of writing, ETH is priced at $1,449, just $550 from the trough of the recent bear market. Meanwhile, Ethereum’s view of recouping its previously-ever $4,878 (ATH) seems increasingly incredible.
It is worth noting that in the face of greater market pressure, the Ethereum ecosystem has also proved its vulnerability. UNISWAP Unithe largest decentralized exchange (DEX) in the Ethereum ecosystem fell 10% today. Similarly, other projects in the defi field, such as Essena thistogether with Aave, fell 10% ghost and eigenlayer My ownThis also reflects a sharp drop of up to 9%, reflecting the general weakness of the entire ecosystem.
eigenlayer and uniswap fell sharply today – Source: Coingecko
Other narratives on Ethereum indicate similar declines:
“Signs of Life” are vague
ETH ETFS experience declines in purchasing power
ETH ETFs have registered large volumes of outflows since late February, indicating a decrease in investor appetite. At the same time, this trend indicates that the long-term growth prospects of ether are relatively soft.
By contrast, Bitcoin has even witnessed a price drop due to recent business conflicts, but is still marked by the purchase of multiple ETFs and venture capital.
ETH ETF continuous outflow – Source: coinglass
Poor grape and chain activities
Gasoline fees on Ethereum have remained unchanged since early 2025, indicating a lack of development momentum and a lack of compelling narrative that can enhance the on-chain ecosystem of this layer 1 blockchain. The 2-layer scaling solution for Ethereum blockchain is highly utilized.
In the past few years, even during the massive cryptocurrency market downturns in 2022-2023, certain categories such as Restaking, Liquidatiking and Fan Fan Tokens are strong enough to drive activity and strengthen the Ethereum ecosystem. However, these waves of innovation have now been greatly reduced. Even the AI department led by FET failed to stand out.
The lack of chain activity has also affected the inflation dynamics of ETH. After the merger, a portion of the transaction fee is burned, which means that the stronger the on-chain activity, the greater the amount of the ethical time fee to burn. In other words, inflation can be avoided when the amount of burned ETH exceeds the amount of newly issued ETH.
Ethereum faces severe inflation – Source: Dune Analysis
However, due to the continued low chain activity on Ethereum, blockchain has slipped into a prolonged inflationary state without effective remedies. Meanwhile, the upcoming Pectra upgrade does not appear to prioritize increased utilization of ether, which is in stark contrast to initiatives such as Berachain’s Proof of Liquidity Program.
Learn more: Ethereum Set Pectra Mainnet released on May 7
WLFI fund associated with Donald Trump recently sold ETH at a loss
According to Arkham, cryptocurrency wallets (WLFI) related to World Free Finance (WLFI) sold 5,471 ETH, worth $8.01 million, and priced at $1,465 per coin. The entity had previously invested approximately $210 million at an average cost of $3,259 to acquire 67,498 ETH, resulting in currently unrealized losses of approximately $125 million.
Source: Arkham
