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Ethereum price dropped 40% in the past three months as per Coinmarketcap data, and this huge fall has sparked discussions.
Standard Chartered Bank’s head of digital assets research Geoff Kendrick labeled it a “midlife crisis” for the blockchain.
Once the go-to platform for decentralized finance (DeFi), Ethereum now grapples with technological upgrades that haven’t yet won back investors.
This article explores why Ethereum price is tumbling, the role of competitors like Solana, internal challenges within the Ethereum Foundation, and the impact of Layer 2 solutions.
The 40% Ethereum Price Drop Explained
The 40% price drop over three months is stark. CoinMarketCap’s historical data, accessed on March 27, 2025, confirms this decline, reflecting a shift in investor sentiment.
Ethereum, the second-largest crypto by market cap, has seen its dominance wane as users chase faster, cheaper alternatives.
This isn’t just a number—it’s a signal of broader market trends, with memecoins and other assets finding homes on rival blockchains.
Solana has emerged as a key competitor, boasting faster transaction speeds and lower fees.
Solana’s trading volumes for certain asset classes, especially memecoins, have surpassed Ethereum’s.
This shift is driven by Solana’s efficiency, attracting both retail and institutional investors.
Adam McCarthy, a research analyst at Kaiko, stated, “Solana’s lower costs and speed are pulling users away from Ethereum’s higher fees and slower transactions.”
Memecoins, often lacking practical utility, have found a thriving ecosystem on Solana, diverting attention from Ethereum’s DeFi focus.
This competition is reshaping the crypto landscape, with data showing a clear user migration.
Behind the scenes, the Ethereum Foundation is facing internal disputes over its future direction.
Sources close to the foundation, as reported by crypto news outlets, suggested disagreements on prioritizing scaling solutions versus maintaining decentralized governance.
These tensions could slow decision-making and innovation, adding to Ethereum’s challenges.
Skepticism is also growing around Ethereum’s DeFi projects. Analysts argue many lack real-world utility, potentially overvalued and at risk of a bubble burst.
This doubt is eroding investor confidence, contributing to the price drop.
Technological Upgrades: Layer 2 Solutions and Slow Adoption
To address scalability issues, Ethereum’s development team has pushed Layer 2 solutions, designed to process transactions off the main chain for faster speeds and lower costs.
However, adoption has been slower than expected. Users report difficulties navigating these technologies, and data shows limited uptake compared to Ethereum’s main network.
Geoff Kendrick, during an interview with Financial Times, criticized these upgrades, saying they’ve led to Ethereum “commoditizing” itself,“ adding,
“By relying on third-party networks for scalability, Ethereum is giving away its value for free.”
This commoditization, he argues, dilutes what made Ethereum unique, turning it into just another blockchain platform.
