One of the worst-performing leading cryptocurrency assets in the market right now is Ethereum (ETH). Despite being a major established digital asset and the only one besides Bitcoin to have its own Spot ETF, its price performance has been nothing but severely disappointing.

However, not everything is lost. There is a positive development on the horizon — staking — which has the potential to provide ETH holders with relief and dare we say, even superior returns.

Does that mean, Ethereum is currently the most undervalued asset right now? Well, let’s find out!

The Performance So Far

The second-largest cryptocurrency with a market cap of $248 billion, Ethereum is currently trading at $2,060, down 27% in the past 30 days, which puts it as the worst-performing asset among the top 20 coins.

This marks the fourth consecutive month that Ether’s price has been on a decline. In fact, in the past 12 months, the ETH price has been red nine times out of twelve, which shows just how depressing it has been for this asset.

Additionally, ETH’s Q1 2025 returns are firmly in negative territory at -38.54%. But that’s not all, even more concerning is the fact that Ethereum hasn’t made a new all-time high (ATH) in over three years. It was during the last cycle that ETH price hit a peak at $4,880 on November 10, 2021.

By Ethereum’s own standards, this puts the current bull run as the worst cycle for ETH so far. The best one was the 2017 cycle, of course. 

After Ethereum’s launch in 2015, the price recorded gains of 754% in 2016. Then, 2017 started under $10, and by the end of that, it had pushed past $800, which further soared above $1,300 in January 2018. The same year, it closed 82% lower at $133.

During the last bull market, ETH price rallied more than 470% and 400% in 2020 and 2021, respectively. The following bear market saw the ETH price decline by 67.5%.

While the last two years have been green, ETH’s performance was far from remarkable. In 2023, its price surged only about 91%, and half of even that (46%) in 2024. In 2025, the price has been down by over 38%.

In comparison, Bitcoin price surged 155.8% in 2023 then 120.84% in 2024 and is currently down only 7.34% this year. While BTC’s 1Q25 performance is negative 7.42%, it comes following a new ATH at $109,000 on January 20.

As of writing, BTC/USD is trading at around $87,000, down 20% from its peak.

As a result of Bitcoin’s outperformance, the ETHBTC ratio recently hit a new multi-year low at 0.0224, last seen in Jan 2021. The ratio has been on a decline since Sept. 2022.

Bitcoin’s massive gains have actually made it the 8th largest asset in the world by market cap of $1.72 trillion, just one place below $1.89 trillion Silver, while Ethereum ranks 48, two steps above Platinum ($2428 bln).

In first place is gold, with a market cap of $20.3 trillion. The precious metal has actually been enjoying a massive rally, hitting a new peak at $3,057.21 per ounce. Gold is up 15% YTD and 87% since Oct. 2022 low as it currently trades at $3,021 per ounce. Meanwhile, ETH is only up a mere 133% since its June low of $888 and BTC 457% from Nov. 2022 low of about $15,600.

Gold’s strength has been the result of crypto-friendly US President Donald Trump causing extreme uncertainty in the market with the announcements of a series of tariffs on major U.S. trading partners, including China, Mexico, and Canada.

While risky assets like Bitcoin, Ethereum, and crypto have been struggling ever since he took office, despite delivering on many promises that Trump made to the industry, gold emerged as the winner as investors rushed to the safety of this safe haven, which is traditionally seen as a hedge against geopolitical and economic uncertainties.

Even stocks have been taking a beating. The S&P 500 surged as Trump had his inauguration as the 47th President of the United States and made new highs at 6,147 last month but fell to 5504.65 on March 13. Since then the market has recovered some as Trump said he may give “a lot of countries” breaks on tariffs. Also, the Fed kept the rates steady but indicated two cuts this year that’ll bring them down by ​​0.5%.

The S&P 500 now sits at 5,767.57, down almost 2% YTD. The tech-heavy Nasdaq performed similarly, declining from 19,928.8 last month to 17,239.40 easily last week. Currently, it is around 18,188.59, down 5.81% YTD.

“Investors are experiencing a slight sigh of relief, but at the same time, they are cynical about how long this may last,” said Sam Stovall, chief investment strategist at CFRA Research. “The causes of this manufactured correction have not evaporated. They are tariffs and what the impact of tariffs could be on economic growth, inflation, and corporate profits.”

With the S&P 500 moving above its 200-day moving average (200 DMA), it’s a possibility that the correction in stocks may be over, for now, and if that’s the case, that means good things ahead for Bitcoin too, for which, the next resistance is at $93,245.

However, the same can’t be said for Ethereum, though its price can be expected to see some recovery.

Click here to learn all about investing in Bitcoin (BTC).

What’s Left to Look Forward To?

If we take a look at key developments, Bitcoin has a few things working in its favor, that is, besides the biggest one, rising prices. 

The major one is a Bitcoin strategic reserve, which is happening not only at the national level but also at the state level and has been making steady progress.

This week, the Strategic Bitcoin Reserve Act passed the State House of Representatives in Oklahoma and now needs to pass through the Senate before the governor can sign it into law. With this move, Oklahoma is now in second place with Texas in the State Bitcoin reserve race, with Arizona in the lead, where two such bills are headed to the House floor for a vote.

Kentucky Governor Andy Beshear also signed a “Bitcoin Rights” bill into law this week to protect the “right to self-custody, run a node, and use of digital assets” without “fear of discrimination.” A Bitcoin reserve bill to allocate excess state reserves in BTC has also been introduced.

But what about Ethereum? Well, these bills, while focusing on Bitcoin, will be good for the entire industry, including Ethereum. But, of course, if ETH has to really capture market attention and experience an outsized performance, it needs some action.

Having pioneered smart contracts, Ethereum is the blockchain that builds decentralized applications (dApps). During the 2017 bull market, Ethereum was home to democratized fundraising through initial coin offerings (DeFi), and then, in the last cycle, it led the DeFi innovation as well as NFTs, GameFi, DAOs, and more. 

This time around, sadly, Ethereum is not leading the chain narrative. Solana took all the market attention, development, and usage this past couple of years. While Ethereum faced competition from other chains in previous cycles too, this time, the blockchain has been missing all the fun and action.

This is evident in the total number of transactions on the blockchain which has barely seen any incline. Transaction fees have also been pretty low. According to Ycharts, the average transaction fee is currently $0.20 with no upticks seen as recorded during the past two cycles.

Having said that, a primary reason for the same has been speculated to be the growing number of layer 2s that offer faster and cheaper transactions. 

These L2s, like Base, according to Geoff Kendrick, Standard Chartered’s global head of digital assets research, have led to a loss of value on Ethereum and recommended taxing these chains.

As a result, the bank slashed its price target for ETH by more than half to $4,000. “We see ETH underperformance continuing,” wrote Kendrick, adding that Ethereum is currently in the middle of a “midlife crisis.” 

Similar views have been shared by VanEck researcher Matthew Sigel, who noted in a report earlier this month that Ethereum’s struggle in terms of both valuation and usage has been “largely due to the erosion of the core factors that once made Ethereum valuable.”

Despite the challenges, Ethereum continues to be the dominant platform for building dApps thanks to its network effect, robust security, and ongoing innovation. For instance, Ethereum is currently preparing for a big upgrade that will improve the network’s scalability and functionality and bolster user safety. 

The upgrade, dubbed Pectra, involves a set of improvements, including one that will enable apps to better reproduce services that banks offer. It will also introduce ways for users to recover their wallets.

Scalability, meanwhile, will be enhanced by dynamically adjusting data availability. By laying the groundwork for Verkle Trees, the upgrade will also enable a future improvement to increase the network’s decentralization by allowing anyone to run Eth nodes on their phones.

The upgrade has already gone live on Holesky and was successfully launched on the Sepolia testnet this month. If all goes well, Pectra can be expected to go live on the Ethereum mainnet next month. 

These continuous improvements should help Ethereum gain developer interest, and exciting projects should help bring the user’s attention back to the network. 

However, for now, not just retail interest but even institutional interest and capital are avoiding ETH.

Click here to learn all about buying Bitcoin (BTC).

After Unremarkable Inflows, Outflows Dominate Ether ETFs

It was last summer that Ethereum Spot exchange-traded funds (ETFs) received regulatory approval from the US Securities and Exchange Commission (SEC). 

During this period, Ethereum ETFs have recorded $2.42 billion in cumulative net inflows and $7.17 bln in total assets, as per the data from SoSoValue. These numbers are a small fraction of what Bitcoin Spot ETFs have seen.

With a six-month head start, Bitcoin ETFs have registered $36.13 bln in cumulative net inflows and $99.31 billion in total assets. BlackRock’s IBIT leads this race with $50.69 bln in total assets, followed by Fidelity’s FBTC at $17.38 bln and then Grayscale’s $17.09 bln.

Interestingly, Grayscale ETHE is currently at the top in Ethereum ETF issuers in terms of net assets at $2.54 bln, with BlackRock’s ETHA second at $2.49 bln and then again Grayscale’s ETH at $960.80 mln. This shows a lack of interest from institutions.

Matter of fact, Ethereum ETFs have been having a brutal time, seeing only outflows in the entire month of March except for one day of green. March 4 was the only exception as net inflows came in at $14.6 mln after eight consecutive days of net outflows, according to data from Farside.

This extremely brief reprieve started yet another stream of selling, marked by 13 consecutive days of outflows totaling $389.2 million. While outflows are not that severe, Ethereum never captured sizable inflows either, and the lack of buying pressure is weighing heavily on ETH prices.

In contrast, Bitcoin has begun to see money flowing in. After the record outflows in February at about $4.2 billion that resulted in the worst February for BTC price-wise, which followed a near-constant stream of outflows in March too, till the 13th, Bitcoin ETFs now have had seven consecutive days of net inflows totaling $869.8 bln.

Given Bitcoin’s stellar ETF performance, the general view is that Ether ETFs’ performance has been rather “meh.” But Robert Mitchnick, head of digital assets at BlackRock, doesn’t believe so and called this a “misconception” at the Digital Asset Summit.

While not amazing compared to their Bitcoin counterparts, “it’s actually been incredibly successful” compared to the actual ETF universe, he stated. 

The appetite for Ether ETFs, according to Mitchnick, can gain traction if the regulatory issues get “resolved.” So, what is this silver lining for Ether?

Click here for the 10 best reasons why you should buy Bitcoin.

Staking is Ethereum’s Best Bet, Institutions May Finally Bite

Amidst the eroding market confidence in Ethereum’s growth potential, a positive development can be expected in the ETF space, where issuers have submitted proposals to offer staking services to institutional investors. 

CBOE BZX Exchange has already proposed allowing staking activities for the 21Shares Core Ethereum ETF. NYSE Arca has also filed a rule change to allow Grayscale’s Ethereum ETFs to stake their Ether holdings, a decision that is expected before the end of May.

Just last week, the NYSE sought a rule change to permit Bitwise Asset Management (ETHW) to offer staking rewards. The SEC has to respond to the amendment within 45 days.

With ETH lacking a clear demand catalyst, this change is being seen as a key variable that could help the digital asset overcome the tough times it is experiencing. After all, institutions love yield, and ETH can offer them passive income on an appreciating asset.

To briefly explain it, staking involves locking up the native asset of a blockchain to bolster the network’s security in exchange for rewards. After Ethereum’s transition from PoW to PoS consensus mechanism, the network requires 32 ETH to become a validator to process transactions and add new blocks to the blockchain. For their efforts, validators earn rewards in ETH.

As of writing, almost 28% of ETH supply is staked, representing 34.27 million ETH, as per Dune Analytics.

This isn’t the first time that ETF issuers have asked the SEC’s approval to offer staking to their clients. Last year, before the Ethereum Spot ETF approvals, several issuers filed for an ETF application with staking included, but they had to remove the staking provisions. 

The SEC under the leadership of former chair Gary Gensler opposed the idea of including staking in Ethereum ETFs as it considered proof-of-stake (PoS) tokens as securities and required registration for staking services. 

But now, under the new administration and shifting regulatory attitudes, staking approvals are expected this year. 

Last month, FOX Business journalist Eleanor Terrett shared on X that “the agency is ‘very, very interested’ in staking, even asking industry for a memo detailing the different types of staking and their benefits.” SEC’s Crypto Task Force even met with industry representatives to discuss incorporating staking features into ETPs.

Staking approval would create a new avenue for passive income for investors without having to engage in the activity directly and this has the potential to escalate the demand for Ethereum.

According to BlackRock’s Mitchnick, staking is the “next phase in the potential evolution“ of Ethereum Spot ETFs. He added:

“There’s no question it’s less perfect for ETH today without staking. Staking yield is a meaningful part of how you can generate investment return in this space.“ 

This problem, however, according to Mitchnick, is “not as simple as … a new administration just green-lighting something and then boom, we’re all good, off to the races. There are a lot of fairly complex challenges that have to be figured out, but if that can get figured out, then it’s going to be sort of a step change upward in terms of what we see the activity around those products is.”

The concerns surrounding ETH are “overdone,“ per him, who explained that as a second-grade level asset, Ethereum is “a technology innovation story.“

Calling it “a bet on blockchain adoption and innovation,“ which is how they advertise this asset to clients, Mitchnick emphasized Ethereum’s use cases, including tokenization, stablecoins, and DeFi. “It does take a fair bit of education, and we’ve been on that journey, but it’s going to take more time,“ he said.

BlackRock has a tokenized money market fund called BUIDL on Ethereum as well as other networks like Aptos, Polygon, and Solana, which has surpassed $1 billion in assets under management.

Click here to learn all about investing in Ethereum.

Final Thoughts

After posting the worst February of its lifetime, Ether continues to have a rough time with prices trading around $2,000. The market is losing its faith in the second-largest asset with experts slashing their forecasts. 

However, nearly a decade old, Ethereum is still new but has created a strong foundation. And the upcoming Pectra update and staking-enabled ETFs can provide the catalyst ETH needs to attract retail and institutional attention and rise higher to finally hit a new ATH.

Click here to learn how to buy Ethereum (ETH).