Why Ethereum Price Doesn’t Rise and Why It Could Rebound

Ethereum (ETH), the world’s second-largest cryptocurrency by market cap, has faced significant price struggles in recent years. The ETH to Bitcoin (BTC) ratio recently hit a four-year low of 0.027, reflecting a massive 70% drop since its peak in September 2022. However, new developments, including massive institutional investments, could set Ethereum on a path to recovery.

In this article, we analyze why Ethereum’s price has been underperforming and how recent events including Donald Trump’s $200M ETH purchase, BlackRock’s $300M ETH investment, and Fidelity’s $49.75M Ethereum acquisition may serve as strong catalysts for a comeback.

1. Why Ethereum Has Lagged Behind Bitcoin

Over the past few years, Bitcoin (BTC) has consistently outperformed Ethereum in price action, largely due to institutional preferences. The launch of spot Bitcoin ETFs drew over $35 billion in capital inflows, compared to just $2.6 billion for Ethereum ETFs. Institutions like MicroStrategy and other major players accumulated large amounts of BTC, reinforcing its role as “digital gold.”

Ethereum, on the other hand, struggled to attract similar levels of institutional attention. Its more complex narrative revolving around DeFi, NFTs, and smart contracts—proved harder for traditional investors to grasp. However, this dynamic appears to be shifting as high-profile institutions like BlackRock and Fidelity enter the Ethereum market in a big way.

2. Donald Trump, BlackRock, and Fidelity Are Betting Big on Ethereum

A significant turning point occurred recently when Eric Trump tweeted in support of Ethereum, followed by reports that Donald Trump purchased $200 million worth of ETH. Around the same time, Fidelity Investments acquired $49.75 million in Ethereum, and BlackRock made an even bigger move with a $300 million ETH purchase.

These high-profile investments are a strong vote of confidence in Ethereum’s long-term potential. Institutional backing can often lead to price surges, as it creates a perception of stability and trust in the asset. If this trend continues, it may pave the way for a sustained Ethereum rally, reversing its prolonged underperformance relative to Bitcoin.

3. Technical Challenges: Ethereum’s Inflation Problem

Despite its proof-of-stake (PoS) upgrade in 2022, Ethereum has faced technical hurdles that have weakened investor sentiment. The Merge upgrade was expected to make Ethereum deflationary by reducing its supply. However, in 2024, Ethereum’s supply unexpectedly increased by 5.4%, growing from 120.1 million to 120.52 million tokens.

Read Also: Ethereum Gas Limit Increase, Strategic Move or Risky Bet?

This increase in token supply contradicted expectations and hurt Ethereum’s scarcity narrative—a critical factor that drives long-term price appreciation. Investors became concerned that Ethereum was not living up to its post-Merge promises, contributing to its underperformance.

Read Also: Ethereum Devs Drop the Date for Pectra Upgrade: March 2025

However, Ethereum’s developers are addressing these concerns through the upcoming Pectra upgrade, scheduled for March. This upgrade aims to reduce transaction fees, improve scalability, and enhance overall network performance. A successful rollout could restore confidence in Ethereum’s technical roadmap and attract both developers and investors back to the ecosystem.

4. Institutional Adoption Signals a New Era for Ethereum

The recent wave of institutional investments represents a paradigm shift for Ethereum. In the past, BTC dominated institutional inflows, but Ethereum is now gaining traction. Companies like BlackRock, Fidelity, and high-net-worth individuals such as Donald Trump are diversifying their portfolios with significant ETH allocations.

This surge in institutional interest may also boost Ethereum staking, a feature that enables holders to earn passive income by participating in network validation. As more institutions stake ETH, it could reduce the circulating supply, creating buy-side pressure that drives prices higher over time.

Additionally, regulatory clarity for cryptocurrency investments could further support Ethereum’s adoption. As governments around the world develop crypto-friendly frameworks, institutional investors are likely to increase their exposure to both Ethereum and Bitcoin.

5. Competition from Other Blockchains

Ethereum’s challenges are not limited to its technical upgrades. Competing blockchains like Solana, Avalanche, and Binance Smart Chain have gained significant market share by offering faster transaction speeds and lower fees. For example, Solana recently captured over 50% of DEX (decentralized exchange) trading volume, attracting both users and developers.

However, Ethereum’s network effects remain strong. Its extensive ecosystem of DeFi protocols, NFT marketplaces, and enterprise partnerships still dwarfs that of most competitors. With the upcoming Pectra upgrade, Ethereum aims to regain its competitive edge by improving scalability and lowering transaction fees.

If successful, Ethereum could reassert itself as the leading smart contract platform, drawing back developers and users who migrated to other chains.

6. Ethereum Sentiment Shows Signs of Recovery

Despite Ethereum’s recent struggles, there are signs of a sentiment shift. According to data from Derive.xyz, option markets indicate a mildly bullish outlook for ETH. “25 delta skews”—a measure of market sentiment—are currently between +8.6% and +9.4%, suggesting that investors expect Ethereum’s price to rise in the medium to long term.

This optimism is reinforced by the recent institutional purchases and endorsements from figures like Eric Trump. As more high-profile players enter the Ethereum market, retail investors are likely to follow suit, creating additional upward momentum.

7. Internal Leadership and Governance Challenges

Ethereum has also faced governance challenges that have created uncertainty among investors. Earlier this year, Ethereum Foundation (EF) executive director Aya Miyaguchi faced criticism over a mistranslated interview, sparking controversy within the community. Vitalik Buterin later addressed concerns around leadership and called for governance reforms to improve decision-making processes within the EF.

While these internal issues have caused some investor hesitancy, Ethereum’s ecosystem has proven resilient. Community-driven initiatives like Etherealize, aimed at attracting institutional investors, continue to support the network’s long-term development.

8. Potential Catalysts for Ethereum’s Future Growth

Several factors could drive a strong Ethereum price rebound in the near future:

• Successful Pectra Upgrade: Enhancing scalability and lowering fees could reinvigorate on-chain activity.
• Continued Institutional Investment: If more institutions follow BlackRock, Fidelity, and Trump’s lead, ETH could see significant price appreciation.
• Increased Network Participation: A revival in active validators and higher fee revenue would signal renewed demand for Ethereum’s services.
• Improved Leadership Clarity: Stronger governance could enhance investor confidence and accelerate key upgrades.

Is Ethereum on the Verge of a Comeback?

Ethereum’s price struggles have been driven by a mix of institutional preferences for Bitcoin, technical delays, and internal governance issues. However, recent developments—particularly BlackRock’s $300M ETH investment, Donald Trump’s $200M purchase, and Fidelity’s $49.75M acquisition—suggest that sentiment is shifting in Ethereum’s favor.

If Ethereum can successfully execute its upgrades and sustain institutional support, it may close the gap with Bitcoin and experience significant price growth in 2025. For now, all eyes are on Ethereum as it navigates this critical period of recovery and transformation.