Ethereum price downturn rattles investors as the token plunges 52% from its December high

Ethereum's price downturn has rattled investors as the token plunged 52% from its December high of $4,105 to below $1870 on March 31.

Ethereum’s price downturn has rattled investors as the token plunged 52% from its December high of $4,105 to below $1,870 on March 31. The steep decline makes it one of the worst-performing blue-chip cryptocurrencies, lagging behind rivals gaining market share.

Standard Chartered analysts downgraded their Ethereum price forecast by 60%, slashing their estimate from $10,000 to $4,000. The bank cited growing competition from layer-1 and layer-2 networks, which erode Ethereum’s market dominance and revenue growth.

On-chain signals worsen as long-term holders exit

Activity on Ethereum has steadily decreased.

Activity on Ethereum has steadily decreased.

Layer-2 networks are overtaking Ethereum’s volume

Ethereum’s layer-2 solutions, such as Arbitrum, Base, and Optimism, have drawn more users due to lower fees. Decentralized exchanges (DEX) on Ethereum processed $9.8 billion in trading volume over the past seven days, according to DeFi Llama.

Arbitrum and Base accounted for $2.87 billion and $2.8 billion, respectively, capturing a share that previously would have belonged to Ethereum’s mainnet.

Meanwhile, BNB Chain’s DEX protocols handled over $13 billion in volume, further underscoring Ethereum’s waning dominance.

Ethereum’s high fees and slower speeds have also limited its potential in emerging markets such as Real World Asset (RWA) tokenization.

According to Standard Chartered, developers may favor alternative networks like Mantra and BNB Chain, which offer more scalable solutions.

BlackRock’s ETH ETF ‘less perfect’ without staking

BlackRock’s head of digital assets, Robbie Mitchnick, described the firm’s Ethereum exchange-traded fund (ETF) as a “tremendous success.”

However, he acknowledged a major limitation—the absence of staking.

Speaking at the Digital Asset Summit, Mitchnick said staking remains a crucial factor for investment returns in Ethereum but remains absent in existing ETFs.

“A staking yield is a meaningful part of how you can generate investment return in this space,” he said, noting the regulatory challenges involved in incorporating staking into an ETF structure.

Data from SoSoValue shows Ethereum ETFs held $7 billion in assets as of March 20, with $2.5 billion in inflows.

However, the products saw $358 million in outflows over the past 11 days, reflecting broader market struggles.