7 Big Problems Holding Ethereum Back Right Now
Ethereum has taken a brutal hit against Bitcoin since late 2021, dropping a staggering 77% in value when measured in BTC terms.
A new report by blockchain analytics firm Santiment outlines the causes behind this prolonged decline—while also pointing to reasons Ethereum’s future isn’t written off just yet.
Despite still ranking second in market cap, Ethereum has failed to recover from its November 2021 peak of $4,760. Many holders remain underwater, especially when comparing their ETH bags to Bitcoin’s continued strength.
Why Ethereum Keeps Falling Behind
Santiment didn’t mince words. The firm detailed several reasons for Ethereum’s fading momentum:
- Layer-2s Backfiring: While Layer-2 networks like Arbitrum and Optimism boost speed and scalability, they may also be siphoning investment away from ETH itself.
- Too Complicated? Bitcoin offers simplicity—Ethereum doesn’t. Frequent upgrades like the Merge and shifting tokenomics confuse investors looking for clarity.
- Fees Still Hurt: Gas fees remain high. Cheaper blockchains like Solana and Cardano are attracting users and devs who want faster, less costly options.
- Regulatory Fog: Bitcoin enjoys clearer classification. Ethereum’s legal status remains murky, making institutional investors cautious.
- Narrative Void: Bitcoin is digital gold. Altcoins are risky bets. Ethereum? It’s stuck in between—with no strong identity to sell to the public.
- Sell Pressure from Staking: The introduction of staking unlocked liquidity for ETH, but that also created steady selling pressure as stakers took profits.
- Rising Competition: Solana, Cardano, and others are chipping away at Ethereum’s once-unchallenged dominance in smart contracts and DeFi.
Santiment summarized the mood by saying critics now view Ethereum as a “laugh” compared to Bitcoin and high-growth altcoins.
But It’s Not All Doom
Still, Santiment reminded readers not to overlook Ethereum’s strengths. It remains the center of gravity for DeFi, NFTs, and tokenized assets. Vitalik Buterin continues to guide a robust and dedicated developer community, and Ethereum’s technical foundation supports more innovation than most chains can match.
The bottom line? Ethereum’s position looks weak against BTC, but its long-term potential may hinge on reclaiming user trust, simplifying its story, and improving usability—before the competition catches up completely.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.