Ethereum Struggles in 2025 as Competitors Gain Ground

Ethereum (CRYPTO: ETH) is facing a challenging year, currently down 47% in 2025, making it the worst-performing major cryptocurrency. Meanwhile, rival cryptocurrencies are beginning to recover, with Ethereum declining another 10% over the past 30 days.

The question remains: is it time to abandon Ethereum, or does it still have the potential to recover? Let’s investigate further.

Ethereum’s Growing Competition

Ethereum is not as dominant as it was just a year ago. Several new rivals have emerged, including Solana (CRYPTO: SOL), Cardano (CRYPTO: ADA), Avalanche (CRYPTO: AVAX), and Sui (CRYPTO: SUI). These competitors have begun taking market share away from Ethereum.

All five of these competitors have market caps exceeding $9 billion. They now rank among the top 20 cryptocurrencies globally, all outperforming Ethereum this year. Additionally, there are numerous smaller competitors focusing on specialized blockchain niches that Ethereum once dominated.

Ethereum’s Existential Issues

This shifting competitive landscape contributes significantly to Ethereum’s declining price. It’s clear that rolling out new upgrades no longer suffices to catch investor attention.

Furthermore, Ethereum seems to be in turmoil. Earlier this year, co-founder Vitalik Buterin hinted at the possibility of stepping down, suggesting a lack of leadership direction.

Image source: Getty Images.

Intra-ecosystem disputes among developers are becoming commonplace, and a significant leadership change at the Ethereum Foundation this year highlights the ongoing challenges.

Adding to the uncertainty, some rivals question Ethereum’s long-term viability. Charles Hoskinson, a co-founder who later launched Cardano, speculated that Ethereum risks becoming obsolete, similar to MySpace or BlackBerry.

Hoskinson argues that intense competition threatens Ethereum’s foothold in decentralized finance (DeFi), its historically strong sector. Economic activity is rapidly shifting from Ethereum (Layer 1) to new blockchain solutions (Layer 2), which are enhancing efficiency. As a result, investor sentiment around Ethereum’s price forecasts has worsened.

Government Support and Strategic Moves

Despite the prevailing negativity, there are signs of institutional support. The Trump administration considers Ethereum crucial for the blockchain and crypto industry’s growth, dedicating resources to bolster it. For instance, Ethereum has been incorporated into the U.S. Digital Asset Stockpile, while World Liberty Financial, linked to the Trump family, has been accumulating Ethereum for its portfolio.

However, it remains unclear whether these initiatives will bear fruit. While the U.S. Digital Asset Stockpile consolidates existing Ethereum holdings, it does not guarantee new purchases, which investors hoped would drive prices upward.

Investment Considerations for Ethereum

In light of current market conditions, recommending Ethereum is challenging. This is unfortunate, given its strong performance history over the past decade. Ethereum remains the second-largest cryptocurrency and enjoys widespread adoption among both institutional and retail investors.

However, it is vital to assess digital assets based on future growth potential rather than past achievements. With rising competition, Ethereum is beginning to fall behind. Unless concrete, large-scale government support emerges, investors may find more attractive opportunities elsewhere.

Should You Invest $1,000 in Ethereum?

Before considering an investment in Ethereum, it’s worth noting:

Analysts have highlighted a list of what they deemed the 10 best stocks to buy now, with Ethereum not included. These selections could yield substantial returns in the years ahead.

For instance, had you invested $1,000 when Netflix made the list on December 17, 2004, you’d now have $594,046. Similarly, a $1,000 investment in Nvidia after its selection on April 15, 2005, would have grown to $680,390.

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Dominic Basulto has positions in Cardano, Ethereum, Solana, and Sui. The views expressed here do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.