Ethereum has been under fire. While Bitcoin surged 118% over the past year, ETH lagged behind with just an 8% gain. During the Lunar New Year, market turbulence hit hard—ETH briefly plunged by as much as 30%. With performance like this, some in the crypto community have begun jokingly (or not so jokingly) calling Ethereum a "has-been coin"—already obsolete, already outpaced.
But that narrative couldn’t be further from the truth.
Recent macro developments, structural upgrades, and Ethereum’s foundational role in decentralized finance (DeFi), stablecoins, and on-chain infrastructure point to a far more resilient and strategically positioned network. Let’s unpack why Ethereum is not only surviving but evolving—despite internal tensions and short-term price struggles.
A Game-Changing Executive Order: U.S. Policy Shifts in Favor of Crypto
On his first day in office, President Trump signed an executive order titled “Strengthening American Leadership in Digital Financial Technology.” This sweeping directive reshaped the regulatory landscape for cryptocurrencies—especially Ethereum.
The order outlined three major pillars:
- Protecting individual rights to mine and self-custody digital assets
- Supporting private-sector stablecoins while halting development of a Central Bank Digital Currency (CBDC)
- Ensuring equal access to financial services for crypto businesses and individuals
For years, uncertainty plagued the U.S. crypto industry. After the FTX collapse in 2023, the SEC launched aggressive enforcement actions, labeling most tokens—including ETH—as unregistered securities. In one high-profile case, Kraken was fined $30 million for offering ETH staking services.
That fear—that holding or using ETH could carry legal risk—has now been significantly reduced. The executive order effectively shields core crypto activities from overreach, legitimizing Ethereum’s role in the financial ecosystem.
👉 Discover how policy changes are unlocking new opportunities in decentralized finance.
Moreover, the endorsement of stablecoins benefits Ethereum directly. Over 50% of all stablecoin value is issued on Ethereum, according to DefiLlama. With regulatory clarity pushing institutional players toward USD-backed digital assets, Ethereum stands to gain the most as the primary settlement layer for these transactions.
And perhaps most importantly, the mandate that banks must stop discriminating against crypto firms opens doors for exchanges, wallets, and infrastructure projects long locked out of traditional finance.
This isn’t just relief—it’s a strategic advantage.
The Ethereum Foundation’s Internal Reforms: Addressing Community Concerns
Amid market stress, the Ethereum Foundation didn’t stay idle. Over the Lunar New Year period, it initiated organizational reforms to address growing skepticism within the community. Three key issues were at the center of debate:
1. Token Sales and Financial Transparency
The Foundation has no recurring revenue—it funds operations by selling ETH. In November 2021, it famously sold 20,000 ETH near the peak price of $4,800, raising eyebrows and admiration alike.
While necessary for sustainability, ongoing sales during bearish markets have sparked backlash. Critics argue that selling pressure from the Foundation exacerbates price declines.
In response, the team has committed to greater transparency around sale schedules and reserve management. Proposals include diversifying funding models through grants, partnerships, and ecosystem-generated revenue streams—reducing reliance on token dumps.
2. The L2 “Bloodsucking” Debate: Innovation or Erosion?
A vocal segment claims Ethereum’s Layer 2 (L2) scaling solutions are “sucking blood” from the mainnet. Their argument? L2s drastically reduce transaction fees and allow alternative tokens (like STRK on Starknet) to serve as gas—diminishing demand for ETH itself.
But this overlooks a crucial reality: L2s don’t replace Ethereum—they depend on it.
All major rollups (Optimism, Arbitrum, zkSync) inherit security from Ethereum’s base layer. They batch transactions and post data back to mainnet, ensuring censorship resistance and finality. Without Ethereum, there is no trust foundation for these chains.
Furthermore, upgrades like EIP-4844 (Proto-Danksharding) are designed to make L2s cheaper and more efficient—driving more activity onto the broader Ethereum ecosystem. More users → more data posted → more need for ETH to secure and scale the network.
👉 See how next-gen scaling is making Ethereum faster, cheaper, and more accessible than ever.
Rather than cannibalizing Ethereum, L2s are expanding its reach—much like suburbs grow because cities thrive.
3. Leadership and Vision: Who Should Steer Ethereum?
Criticism has also targeted Aya Miyaguchi, former Executive Director of the Ethereum Foundation, for lacking technical expertise and perceived detachment from “crypto culture.” While she stepped down in 2022, concerns about governance and leadership continuity remain.
Today, decision-making is increasingly decentralized. Core upgrades emerge from collaborative research among independent teams—Consensys, Paradigm, EF Research, and others. Vitalik Buterin remains a guiding visionary, but implementation is community-driven.
This distributed model may lack centralized efficiency—but it aligns with Ethereum’s ethos: resilience through decentralization.
Why Long-Term Trajectory Matters More Than Short-Term Price
As political economist Professor Guan-Nan Zhou notes in his book Buy Long, "Predicting short-term price fluctuations is gambling; predicting long-term trends is skill."
Ethereum’s value isn’t tied solely to its spot price. It’s embedded in:
- Smart contract dominance: Over 70% of DeFi TVL resides on Ethereum or its L2s
- Institutional adoption: ETF approvals, corporate treasuries, regulated stablecoins
- Developer activity: Highest number of active contributors among all blockchains
- Security budget: Largest proof-of-stake network by staked value
These fundamentals suggest strength beneath the surface.
Yes, Ethereum faces competition—from Solana’s speed to Bitcoin’s simplicity. But no other blockchain matches its combination of security, decentralization, and ecosystem maturity.
Frequently Asked Questions (FAQ)
Q: Is ETH still relevant given its low price growth compared to BTC?
A: Absolutely. Price appreciation lags don’t reflect usage growth. Ethereum processes more complex operations than BTC and powers most DeFi, NFTs, and Web3 applications.
Q: Could L2s eventually make ETH obsolete?
A: No. L2s rely on Ethereum for security and data availability. Their success strengthens—not weakens—the base layer.
Q: What happens if the U.S. reclassifies ETH as a security?
A: The recent executive order makes this unlikely in the near term. Moreover, Ethereum’s transition to proof-of-stake and decentralized governance supports its classification as a commodity.
Q: How does Ethereum generate value for holders?
A: Through transaction fees (burned via EIP-1559), staking rewards, and increased demand as more apps and users join the network.
Q: Are Foundation token sales a red flag?
A: Not inherently. Responsible treasury management requires funding operations. The key is transparency—which the Foundation is now prioritizing.
Q: What’s next for Ethereum after the recent reforms?
A: Continued scaling via rollups, improved UX with account abstraction, and stronger institutional integration—all while maintaining decentralization.
Final Thoughts: Ethereum’s Evolution Is Just Getting Started
Labeling Ethereum a “dead coin” ignores both its technological depth and strategic momentum. Regulatory tailwinds, scaling breakthroughs, and a resilient developer community are laying the groundwork for long-term dominance.
Short-term volatility will come and go. But those who focus on fundamentals—network effects, real-world usage, and sustainable innovation—will see past the noise.
Ethereum isn’t fading. It’s transforming.
👉 Stay ahead of the curve with insights into Ethereum’s next evolution phase.