Here’s how Ethereum is losing the price war, but winning the real battle

ambcryptoPublished on 2025-12-27Last updated on 2025-12-27

Abstract

Ethereum may appear underwhelming in short-term price performance, but it continues to dominate on-chain activity and institutional adoption. It controls approximately 68% of the total DeFi TVL, a figure that rises above 70% when excluding its own Layer 2 solutions. Major players like Tom Lee’s Bitmine have staked significant amounts of ETH, demonstrating strong long-term confidence. However, ETH’s price is heavily influenced by derivatives trading, with futures volume reaching record levels—nearly $5 in futures for every $1 in spot ETH. This high leverage explains the market's volatility and disconnect from Ethereum’s solid fundamentals.

Ethereum [ETH] may look underwhelming at first glance, but there’s more to it than what meets the eye.

While markets fixate on flimsy short-term price performance, Ethereum is dominating on-chain activity and attracting the big players. The disconnect is growing, and it’s worth paying attention to why.

Ethereum, the DeFi king

Ethereum’s mainnet alone still controls around 68% of total DeFi TVL, and that’s far ahead of every other chain. Even during the fall of 2022, its share never fully broke. The network dipped to near 45% before recovering through 2024 and into 2025.

Source: DeFiLlama

What’s more telling is the big picture.

While the aforementioned data from DeFiLlama includes Ethereum’s L2s like Arbitrum [ARB], Optimism [OP], and Base, its share climbs well past 70% when it excludes this competition.

There’s more!

Source: X

Tom Lee’s Bitmine staked 74,880 ETH worth $219 million. So, there is tons of confidence in Ethereum’s long-term growth.

Meanwhile, SharpLink Gaming redeemed 35,627 ETH – A sign that institutional moves are becoming more active and tactical.

Source: X

This fits the greater trend. Ethereum’s share of DeFi hasn’t weakened despite capital rotating. Instead, the big players are learning to work within the system.

What’s driving the price narrative?

While its fundamentals anchor Ethereum, price action is being influenced elsewhere… in derivatives.

Source: Cryptoquant

In 2025, ETH Futures activity went up to record levels. Binance alone saw over $6.7 trillion in ETH Futures volume, nearly double last year.

Other exchanges like OKX, Bybit, and Bitget followed the same pattern, confirming that speculation has been creating pace.

Source: Cryptoquant

The imbalance is pretty striking. According to analyst Darkfost on X, for every $1 in spot ETH, nearly $5 flows into Futures.

This level of leverage explains why price moves feel chaotic and unstable, even as Ethereum’s fundamentals remain unshaken.

Final Thoughts

  • Ethereum controls 68% of DeFi TVL and 70% with L2s.
  • ETH’s price is being driven by record leverage, explaining volatility and market disconnect.
Next: Bitcoin & Ethereum 2025 – Year in review and 2026 outlook
Share
  • Share
  • Tweet

Trending Cryptos

ctr
CitreaCTR
wstusdt
wrapped stUSDTWSTUSDT
apr
aPrioriAPR
ctx
Cryptex FinanceCTX
audio
AudiusAUDIO
comp
CompoundCOMP
mantra
MantraMANTRA
waxl
AxelarWAXL
bill
Billions NetworkBILL
pyth
PYTH (Pyth)PYTH
rune
THORChainRUNE
velodrome
Velodrome FinanceVELODROME
brev
BrevisBREV
cake
PancakeSwapCAKE
jst
JUSTJST

Related Questions

QWhat percentage of total DeFi TVL does Ethereum's mainnet control, and how has this changed since 2022?

AEthereum's mainnet controls around 68% of total DeFi TVL. It dipped to near 45% during the fall of 2022 before recovering through 2024 and into 2025.

QHow does the inclusion of Ethereum's Layer 2 solutions (L2s) affect its share of the total DeFi TVL?

AWhen Ethereum's Layer 2 solutions like Arbitrum, Optimism, and Base are included, its share of total DeFi TVL climbs well past 70%.

QWhat evidence from the article suggests that institutional players have strong confidence in Ethereum's long-term growth?

AThe article cites Tom Lee's Bitmine staking 74,880 ETH worth $219 million and SharpLink Gaming redeeming 35,627 ETH as evidence of institutional confidence and active, tactical moves within the ecosystem.

QAccording to the analyst Darkfost on X, what is the ratio of futures trading volume to spot trading volume for Ethereum?

AAccording to analyst Darkfost on X, for every $1 in spot ETH, nearly $5 flows into Futures.

QWhat is the primary reason given in the article for Ethereum's price volatility and its disconnect from strong on-chain fundamentals?

AThe primary reason is record levels of leverage in the derivatives market, with futures activity creating chaotic and unstable price moves despite Ethereum's strong fundamentals.

Related Reads

In Conversation with Ray Dalio: We Are Currently in an AI Bubble, with 1% of My Portfolio in Bitcoin

Ray Dalio, founder of Bridgewater Associates, warns in an interview that the current AI boom shows classic bubble characteristics, which could lead to significant economic downturns as seen in past cycles like 1929 or 2000. He explains that speculative enthusiasm, fueled by debt and overvaluation, often precedes a crash when rising rates or taxation force asset sales, causing widespread losses and recession. Dalio also outlines his "Big Cycle" theory, describing an approximate 80-year pattern where widening wealth gaps, massive government deficits, and shifting geopolitical power (like China's rise) create internal conflict and global instability. He emphasizes that we are in a late-cycle, transitional phase where traditional powers like the US and UK face decline. For personal wealth protection, Dalio advises diversification beyond cash into assets like stocks, bonds, real estate, and particularly gold, which he prefers over Bitcoin. While he holds about 1% of his portfolio in Bitcoin as a non-printable hard asset, he views gold as more secure from technological or governmental threats. Regarding AI's impact, Dalio believes it will disproportionately benefit capital owners, worsening inequality by replacing both physical and cognitive labor. He suggests that human intuition and emotional intelligence, combined with AI, will be key for future workers. On taxation, Dalio argues that wealth taxes are impractical and risk triggering asset sell-offs, reducing productive investment. He points to the UK as a cautionary example of debt, low productivity, and political strife. Geopolitically, Dalio foresees a more regionalized world, with the US showing weakness in prolonged conflicts like with Iran, akin to past imperial declines. The ideal outcome, he suggests, is coexisting powerful blocs (e.g., Americas, China-Asia Pacific) without major war.

marsbit3m ago

In Conversation with Ray Dalio: We Are Currently in an AI Bubble, with 1% of My Portfolio in Bitcoin

marsbit3m ago

Daily 7.2 Trillion KRW: Foreign Capital's Record Net Buying on Friday! Wall Street Says Headwinds for Korean Stock Fund Flows Have Subsided

South Korean stock market sees a dramatic shift in fund flows. On July 31, foreign investors made a record net purchase of approximately KRW 7.2 trillion in KOSPI stocks, marking a fundamental reversal from the persistent large-scale net outflows seen in previous months. This contributed to a significant narrowing of foreign net selling in July to KRW 9.8 trillion, down sharply from KRW 48.4 trillion in June and KRW 44.5 trillion in May. Simultaneously, domestic institutional pressure eased. South Korean pension funds and asset managers turned to a net buying position in July, purchasing KRW 1.0 trillion worth of KOSPI shares, contrasting with net sales in May and June. Market volatility is expected to be dampened by new financial regulations. Effective July 31, the Financial Services Commission tightened access for retail investors to single-stock leveraged ETFs by raising the minimum cash deposit requirement. Trading volumes for these products subsequently dropped to about 50% of their monthly average. Citigroup Research maintains its year-end KOSPI target of 10,000 points. The firm cites several supportive factors: the substantial easing of headwinds from capital outflows, a robust fundamental outlook for the semiconductor sector, historically low market valuations, strong economic fundamentals, and the potential for policy support from financial authorities if needed.

marsbit3m ago

Daily 7.2 Trillion KRW: Foreign Capital's Record Net Buying on Friday! Wall Street Says Headwinds for Korean Stock Fund Flows Have Subsided

marsbit3m ago

Breaking! OpenAI's Next-Gen AI Solves 10 Fields Medal-Level Problems

OpenAI's next-generation AI model Astra achieves breakthroughs in 10 long-standing mathematical conjectures. The results, including constructing the first known infinite, finitely presented non-sofic group—resolving a major question since 1999—and advancing the high-dimensional sphere packing problem beyond a 46-year-old barrier, are detailed in a 249-page paper. Key proofs have been formally verified using Lean 4. The AI also refuted a rigidity conjecture by Fields Medalist Alain Connes. According to OpenAI, generating these proofs cost under $2,000. Experts describe the findings as potentially Fields Medal-worthy and a landmark moment for both mathematics and AI, showcasing the model's ability to produce profound, human-like reasoning across diverse fields like group theory, geometry, and operator algebras.

marsbit1h ago

Breaking! OpenAI's Next-Gen AI Solves 10 Fields Medal-Level Problems

marsbit1h ago

How to Make Yourself Irreplaceable by AI Forever

This article argues that the primary threat from AI is not job replacement, but remaining trapped in "wage slavery"—financial dependence on employers. The path to becoming irreplaceable is not resisting AI, but becoming an "unemployable" individual who builds their own meaningful enterprise. The author identifies five key elements for this: Agency (acting without permission), Taste (judging what's worthwhile), Persuasion, Persistence, and Iteration. The solution is to stop being a "pawn" in someone else's game. To start, you must fundamentally change your identity and environment, then engage in rapid, real-world trial and error. While both coding and creating media (content) are powerful, content is more crucial. AI can generate assets, but true value lies in subjective, human-driven content that builds trust and narrative. The actionable advice is to carve out 15 minutes to answer foundational questions: 1) Uncover your "raw material"—what you know deeply or solve effortlessly. 2) Define your contrarian perspective—what common beliefs you think are wrong. The intersection of these answers is your direction. Finally, you must launch by publishing your first core idea immediately, using the feedback to iterate and develop the skills needed for a self-directed life and career.

marsbit2h ago

How to Make Yourself Irreplaceable by AI Forever

marsbit2h ago

Thanks to Dice Rolls, Bitcoin Keys Are Stored Offline, But Not Everyone Will Do It

The article discusses using dice rolls to generate secure Bitcoin wallet seeds, providing entropy independent of potentially flawed hardware random number generators. It explains that each fair dice roll offers about 2.585 bits of entropy, with around 50 rolls needed for a standard 12-word seed phrase and 99+ recommended for higher security. This method gained attention after a vulnerability was revealed in some Coldcard hardware wallets, where a faulty firmware RNG (dating back to 2021) compromised generated keys. The analysis notes that while a dice-generated main seed was safe from this specific flaw, other Coldcard functions (like creating paper wallets, backup keys, or passwords) could still be vulnerable if they used the defective RNG. The piece argues that while dice-based entropy is technically robust, the manual process is error-prone, tedious, and unrealistic for most new users, who might make mistakes in recording or inputting rolls. It concludes that while manual entropy generation should remain an option for advanced users, the long-term goal is to develop reliable, user-friendly hardware and software that securely generates randomness without requiring specialized knowledge. Coldcard users are advised to check their firmware version and replace any secondary secrets (like paper wallet keys) created with vulnerable devices, while also considering multi-signature setups with devices from different manufacturers for added security.

cryptonews.ru5h ago

Thanks to Dice Rolls, Bitcoin Keys Are Stored Offline, But Not Everyone Will Do It

cryptonews.ru5h ago

Trading

Spot

Hot Articles

Discussions

Welcome to the HTX Community. Here, you can stay informed about the latest platform developments and gain access to professional market insights. Users' opinions on the price of S (S) are presented below.

活动图片

Top Questions

Hot Categoriesright-arrow

Hot Tagsright-arrow