Cryptonews Cryptocurrency

Is Ethereum Dead in 2025? The Current State of ETH

Author

Eric Huffman

Author

Eric Huffman

About Author

Eric Huffman's background includes a decade plus in business management as well as personal finance industry experience in insurance and lending. A strong understanding of consumer finance combined...

Author Profile

Last updated:

April 1, 2025

Why Trust Cryptonews

Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

The Ethereum project rose to prominence in 2015 by bringing smart contracts to blockchain networks. No longer was cryptocurrency just a digital asset; now, blockchains could host powerful applications, giving these digital assets new utility. However, other blockchain projects like Solana now offer smart contracts with much cheaper and faster transactions. With so many smart contract chains now, is Ethereum dead?

It may be a bit early to declare that Ethereum is dead. However, it does have some impressive competition. In this guide, we’ll take a pulse on the Ethereum project and market dynamics to analyze its health and prospects going forward. Let’s dig in.

Summary: Is Ethereum Dead?

New tech often improves on existing technologies, and nowhere is this more true than in the blockchain space. Ethereum itself was an improvement on Bitcoin in one primary sense: Turing-complete smart contract support. Ethereum introduced a powerful programming language (Solidity) that made decentralized finance (DeFi) and Web3 possible.

While other chains now offer similar features, Ethereum enjoys a network effect similar to Bitcoin’s and remains the largest smart contract network and second-largest cryptocurrency in the world.

ETH still holds the second-largest market capitalization. With a more than $200 billion market cap, ETH’s market value is still 2.5 times larger than its closest smart contract competitor, BNB Chain, and nearly 4 times larger than Solana (SOL).
Ethereum ETFs launched in 2024. The US Securities and Exchange Commission (SEC) approved applications from the CBOE, Nasdaq, and NYSE to list exchange-traded funds (ETFs) based on the price of spot ether (ETH). Several major ETF issuers, including BlackRock and Fidelity, launched ETH ETF products, attracting more institutional investors.
Ethereum TVL eclipses all competing chains. The total value locked (TVL) on Ethereum — a measure of assets locked in smart contracts — is more than 50% of the entire market. The closest competitor, Solana, holds 7% of the market’s TVL. BSC trails with 5.4%, less than the combined TVL for Ethereum’s two largest Layer 2 (L2) chains, all of which use ETH as fuel and settle transactions on the Ethereum blockchain.

Is Ethereum dead? Far from it. However, the project still faces challenges in scalability and transaction costs. Let’s examine the big picture for Ethereum.

What is Ethereum?

Ethereum is a smart contract-enabled blockchain launched in 2015 by a group of cofounders, including Vitalik Buterin, who is still seen as the face of the project. The Ethereum Whitepaper published in 2014 detailed the goals of the blockchain project and drew a sharp distinction between Ethereum and Bitcoin.

At the time, both projects used proof-of-work (PoW) to secure their respective networks, making Ethereum’s smart contract support its distinguishing feature. Smart contracts are computer programs that run on the blockchain, allowing applications like lending and borrowing apps, decentralized exchanges, and on-chain voting for decentralized protocols.

Like Bitcoin, Ethereum has a limited supply of its native token, ether (ETH). However, following Ethereum’s conversion to proof-of-stake (PoS) consensus, the network now bases ETH supply on two key factors. Staking rewards inflate the supply, while transaction fees (paid in ETH) shrink the supply; the Ethereum network burns the base gas fee for transactions.

The resulting push-pull supply dynamic has led to a slightly deflationary market sentiment for cryptocurrency that remains in high demand. However, following the Dencun upgrade, the ETH supply ticked slightly upward.

The Current State of Ethereum

Ethereum’s move to proof of stake as the network’s consensus mechanism improved energy usage by more than 99%. The move also helped launch a new asset in form of liquid staked ETH, yield-bearing tokens that can be bought, sold, swapped, or used as collateral.

However, high network costs remained, and transaction times were still relatively slow compared to newer networks like Solana. Several Ethereum Improvement Proposals (EIPs) target higher fees and scalability issues for the chain.

EIP-4844: The March 2024 Dencun upgrade brought lower-cost transactions to Ethereum L2 networks like Base, Optimism, and Arbitrum. The upgrade included Proto-Danksharding, an intermediary step toward full Danksharding, with both steps saving storage space on the blockchain. Following the upgrade, median transaction fees on Arbitrum, the leading L2, dropped from more than $0.70 to less than a penny.
EIP-1153: Transient storage opcodes also promise to reduce Ethereum’s transaction costs. A shift to temporary storage for smart contract execution is expected to make smart contracts faster and more affordable.
EIP-5656: Adding the MCOPY opcode to Ethereum can reduce the cost of copying memory within a smart contract by more than 3.5 times.

Proposed and already implemented changes to Ethereum range from incremental to monumental, with the network addressing scalability concerns in a deliberate fashion that prioritizes stability.

Throughout the process, Ethereum remains the leading smart contract network, with both Ethereum Mainnet and its leading L2 networks hosting some of the most popular DeFi applications. The Base L2 chain has also become a hub for meme coins, alongside powerful DeFi protocols.

Ethereum Price Performance in 2025

While it hasn’t been able to repeat 2021’s bull-market euphoria, ETH’s price made a bold attempt to update the All-Time-High (ATH) at the end of 2025, although the recent correction eliminated those gains. Some analysts expect Ethereum to return to the $4,000 level by the end of 2025 if the crypto market stays strong.

The crypto landscape can change quickly, making price predictions seem fanciful at times. However, Cathie Wood of ARK Invest sees a potential for ETH to reach a $20 trillion market cap by 2032. This suggests a token price of more than $166,000. Traders on Binance predict the ETH price will reach about $4,700 by 2030, a 152% increase from the current price of $1,860.

The Bullish Case for Ethereum: Why it Isn’t Dead

Much like Bitcoin, Ethereum enjoys a network effect that makes it difficult to shake from its position as the world’s largest smart contract blockchain. This position is fortified by the popularity of ERC-20 tokens, the availability of battle-tested decentralized applications (dApps), and the largest development community of any blockchain.

The Biggest Smart Contract Blockchain

During 2021’s bull market, Ethereum represented nearly 70% of TVL for all chains. By 2022, this figure fell just below 50% as the cryptocurrency market chased yields on ill-fated projects like Terra Classic. Following the collapse of Terra’s stablecoin in 2022, TVL flocked to Ethereum again, with TVL increasing by nearly 20% in a single month. Today, Ethereum represents more than 52% of TVL, with Ethereum L2 projects pushing the aggregate to over 60%.

While other blockchains offer smart contracts, the most used and most trusted dApps are found on Ethereum Mainnet and L2 chains like Arbitrum and Base.

ERC-20 Token Standard

Ethereum’s ERC-20 token standard makes the chain attractive for users who want an easy experience and provides countless ways for developers to create utility with new tokens. Leading crypto wallets support the top ERC-20 tokens and offer an easy way to add newer tokens by using the token’s contract address.

Leading Network for DeFi and dApps

Ethereum is also home to the leading dApps and DeFi protocols. These range from liquid staking to lending and swaps.

Lido (liquid staking): $17.6 billion TVL
Aave V3 (lending and borrowing): $17.7 billion TVL
EigenLayer (ETH restaking): $8.67 billion TVL
Uniswap V3 (decentralized swaps): $3.8 billion TVL
Maker DAO (lending/asset-backed stablecoin): $2.2 billion TVL

Many of Ethereum’s top applications, such as Aave and Uniswap, are also available on Ethereum L2 networks.

Largest Active Developer Community

Ethereum has the largest developer community by far, with nearly 8,000 developers in 2023, compared to just over 1,600 for Solana, less than 1,100 for Bitcoin, and under 500 for Cardano, according to data from DeveloperReport. EVM-compatible L2 chains that settle on Ethereum Mainnet also boast impressive developer activity, with developers for leading L2 chains adding another 3,800+ developers to the Ethereum ecosystem.

The Bearish Case for Ethereum: Why it Could Die

Smart contracts set Ethereum apart from other blockchains at its launch. However, several prominent chains now offer smart contract functionality with lower fees and faster transaction speeds.

Struggles with Scalability

Although proposed improvements promise to increase Ethereum’s throughput to as much as 100,000 transactions per second (TPS), the current performance remains well below that figure. Transaction speeds of 15-30 TPS make Ethereum marginally faster than Bitcoin, albeit with faster finality. By comparison, Solana boasts top speeds of up to 65,000 TPS. The combination of lower costs and faster transactions lets newer networks gain market share.

High Gas Fees

Ethereum Mainnet has an unfortunate reputation for high gas fees. While transaction fees have been declining over the past months, they are still higher compared to competitors like Solana. As of April 2025, the average gas fee on Mainnet is $0.3. These costs fluctuate based on network demand and the complexity of the smart contract, leading to much higher costs in many cases.

By comparison, Solana’s average fee typically ranges from $0.03 to $0.04. However, in context, Solana network fees for many types of transactions are three to five times higher than those of Ethereum Layer-2 networks like Arbitrum, Base, and Optimism. Higher fees remain a problem on Ethereum Mainnet.

Competition from ‘Ethereum Killers’

Lower gas fees and faster transactions have led several networks to be dubbed “Ethereum Killers.” While the rumors of Ethereum’s demise have been greatly exaggerated, some competing networks have taken a notable market share.

Solana: The Solana network’s average speed of 1,000 TPS and $0.03 transaction costs make it a popular alternative to Ethereum.
Cardano: Founded by Charles Hoskinson, an Ethereum co-founder, Cardano enjoys a loyal community. The project now includes support for smart contracts and is known for its stability. Gas fees of $0.10 and up are higher than on Solana but much lower than Ethereum Mainnet gas fees.
Avalanche: The Avalanche network uses a blockDAG rather than a blockchain, allowing more transactions to execute in parallel. The project allows subnets, which are independent networks that can be customized to specific tasks. Transaction fees on Avalanche average about $0.30.

Is Ethereum a Good Investment in 2025?

Ethereum has some notable competition now and still faces some big challenges in bridging the scalability gap between its current performance and Ethereum’s theoretical performance after proposed network upgrades. However, the scalability upgrades already live on L2 networks negate much of the criticism leveled against Ethereum’s usability.

So, is Ethereum a good investment? Most industry experts agree that ETH should still represent a significant part of a diversified crypto investment portfolio.

If you want to gain exposure to ETH, you can do it through Best Wallet, a non-custodial wallet with multi-chain support.

Let’s consider the pros and cons of Ethereum as an investment.

Pros

Staking rewards of up to 4% provide crypto passive income.
EthereumL2 networks provide a cost-effective way to transact.
Ethereum is home to the leading dApps for DeFi and other protocols.
Spot ETH ETFs are expected to increase demand for ETH.

Cons

Transaction costs on ETH Mainnet remain higher than on Solana, Cardano, or Avalanche.
The regulatory uncertainty may become a challenge for Ethereum.
Ethereum’s Dencun upgrade made ETH slightly inflationary, with its effect on future supply unknown.

Buying Ethereum vs ERC-20 Tokens

Buying ETH itself is the most common way to invest in the Ethereum ecosystem. However, a number of ERC-20 tokens could also represent attractive investment opportunities. Ethereum’s fully diluted market cap of $423 billion suggests that promising ERC-20 tokens could return higher gains.

Tokens like Chainlink (LINK), Uniswap (UNI), and Aave (AAVE) play key roles in Ethereum and its L2 networks and could potentially run much further in percentage gains. Several Ethereum meme coins, including Shiba Inu (SHIB). PEPE, and FLOKI, could also outperform ETH itself, some of which provide utility in addition to being a fun way to speculate.

Conclusion

Is Ethereum dead? No. The Ethereum ecosystem continues to dominate the smart contract blockchain segment, and the project improves incrementally through well-tested upgrades. Expect to see additional growth in L2 market share and, in the long term, impressive scalability improvements for Ethereum Mainnet. Ethereum’s Solidity programming language and the vast library of open-source code help endure a robust development environment for the foreseeable future.