Ether’s Year-to-Date Performance and Market Insights
Ether (ETH) has experienced a notable decline in its year-to-date performance, with a drop of over 20%. However, recent reports from Wall Street bank Citi suggest that the underlying fundamentals of the cryptocurrency are showing signs of improvement. Specifically, the total value locked (TVL) on the Ethereum blockchain has surged significantly, indicating a robust growth trend.
In a research report released on Monday, analysts led by Alex Saunders highlighted that, despite the volatility in user activity over the past few weeks, the overall fundamental backdrop for Ethereum remains promising. The report states, “While user activity has been volatile in recent weeks, the fundamental backdrop is not all that murky.”
Citi’s analysis points out that the TVL on the Ethereum network has seen a sharp increase. Additionally, ether exchange-traded funds (ETFs) continue to attract inflows, and there is a growing interest in searches related to Ethereum. Particularly following the U.S. elections in November, the flows into ether ETFs turned positive, accumulating a total of $3.2 billion since their inception in July.
However, the report also notes that stronger user growth on layer-2 solutions and competing blockchains like Solana has sparked discussions regarding Ethereum’s competitive edge in the market. Notably, President Trump’s World Liberty Financial reportedly holds over $200 million worth of ether, which could be perceived as a significant factor that might motivate the U.S. government to bolster its support for the crypto industry.
The analysts conclude that the relative performance of ETH and other altcoins may serve as an indicator of the industry’s optimism regarding the potential for regulatory clarity in the United States. Furthermore, they observe that the recent weakness in ether prices has coincided with a surge in bitcoin (BTC) dominance, which has now reached multi-year highs exceeding 60%.
