Following the launch of spot Ethereum ETFs in the US in the summer of 2024, the market share of the second-largest cryptocurrency by capitalization has nearly halved. This was reported by analysts at Matrixport.
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According to experts, while Ethereum was once dubbed the “fuel” of the crypto market, its current trajectory resembles a recession.
Many tokens have followed a similar pattern: rapid growth driven by hype, followed by a sharp decline and prolonged price drops. The situation is exacerbated by a lack of significant liquidity in the market. This creates a pyramid structure, after which the asset takes a long time to recover.
Meanwhile, Bitcoin remains stable despite limited liquidity presence. Analysts noted that a new wave of growth for digital gold would require one of the following factors:
- easing of monetary policy by the Fed;
- an increase in stablecoin supply;
- a macroeconomic boost such as an increase in the money supply.
However, current indicators suggest a low likelihood of significant capital inflow into the industry in the near future, Matrixport emphasized.
Market activity remains low: Bitcoin ETF trading volumes are limited, and stablecoin issuance has sharply declined. This confirms weak investor interest, who are currently focused on TradFi.
Pressure is mounting due to economic uncertainty related to the reassessment of trade policies and tariffs.
Despite the correction, the first cryptocurrency demonstrates high resilience, analysts noted. The risks of strict regulation and bans observed in the past have diminished.
Back in April, the SEC approved the listing and trading of options on ETH-ETF by BlackRock, Bitwise, and Grayscale.