jakiro
Author: Yohan Yun Source: cointelegraph Translation: Shan Oppa, Bitchain Vision
Ethereum is in the process of being foundedOne of the most critical moments.The usage rate of the underlying network is declining sharply, with core data approaching years of lows, even co-founder Vitalik Buterin proposedCompletely reform the Ethereum architectureradical advice.
And institutional investors no longer wait for the results.On-chain data shows that long-time backers like Galaxy Digital and Paradigm have cut their Ethereum (ETH) positions in recent weeks.
So far, activity on the Ethereum mainnet has continued to decline throughout April:Internet handling fees are decreasing, but inflation is rising.Although Layer 2 networks are still thriving, they areErosion of the value acceptance capability of the main network.
However, things are not just the “collapse” of Ethereum.Some giant whales regard this downturn as aA rare opportunity to buy at the bottom.Even the institutions that are selling ETH have not completely abandoned it.
Institutions “abandon” Ethereum, but are they really going their separate ways?
These institutions seem to be “breaking up”, but they can’t let go of this “ex-in-law”.Instead of completely blocking ETH, they “refrigerated” it while trying “new objects” like Solana.
In recent weeks, on-chain analysts have found multiple institutions transferring large amounts of ETH from their tagged wallets, most likely for sale.Lookonchain reports that Galaxy Digital has transferred 65,600 ETHs to Binance (worth about $105.5 million).The company previously held about 98,000 ETH in February, and has now dropped to around 68,000 (data from Arkham).
Although Galaxy’s ETH position has declined recently,Still at a high level compared to the beginning of the year.This also reflects the overall trend of Ethereum’s investment products.According to CoinShares, $26.7 million has been outflowed in ETH investment funds over the past week, with a cumulative outflow of up to $772 million in the past eight weeks.However,Net inflows from the beginning of the year to date remained at $215 million.
Meanwhile, Galaxy also pulled out 752,240 SOLs (worth about $98.37 million).Some of Ethereum’s market popularity was snatched away by Solana – especially in the memecoin craze from 2024 to early 2025, Solana became the main battlefield.Although the craze eventually cooled down by scams, robotic operations and inferior projects, it also demonstrates Solana’s technical strength—Under high transaction volume, it can still maintain low fees and no major downtime.
Paradigm is also another investment institution that cuts its ETH position.On April 21, the company transferred 5,500 ETH (about $8.66 million) to Anchorage Digital.According to on-chain analyst EmberCN, Paradigm has transferred about 97,000 ETHs (worth about $301.57 million) to Anchorage and then flowed to centralized exchanges.
“While institutional investors initially bought ETH based on the narrative of ‘supersonic’, they are now facing the real problem of declining protocol revenue and deteriorating token economic model,” said Jayendra Jog, co-founder of Sei Labs, to Cointelegraph.
Ethereum returns to “inflation” state
The deflationary characteristics of ETH were once an important selling point to attract investors.This mechanism was introduced into the Ethereum network through two major upgrades.First of allLondon Hard Fork in August 2021, introduced the EIP-1559 proposal, which burned some transaction fees; followed byThe Merge upgrade in September 2022, Ethereum has officially converted to a Proof of Stake (PoS) mechanism, significantly reducing the issuance of new coins.
After the merger upgrade, the total ETH supply continued to decline untilApril 2024, ETH began to re-enter the inflation state.arriveEarly February 2025, the total supply of ETH has beenMore than the level at the time of merger.
ETH inflation is partly due to a sharp drop in network fees, resulting in a decrease in the amount of ETH destroyed.According to IntoTheBlock data,From April 14 to 21, 2024, Ethereum Network charged a handling fee of 1,873.52 ETH.This is slightly higher than the 1,697.61 ETH for the week of March 17, and that week wasThe week with the lowest fees since July 31, 2017(Price by ETH).
Vitalik proposes radical proposal: Replace EVM with RISC-V
On April 20, Vitalik Buterin proposed to set the current Ethereum Virtual Machine (EVM) instruction set.Replace with RISC-V architecture, to improve the speed and efficiency of the network execution layer.Some people see this move as a signal of “surrender” to the existing architecture.
Sei Labs co-founder Jayendra Jog commented: Vitalik’s RISC-V proposal is essentially an admission that the underlying architecture of EVM has hit its limits.When the founders of Ethereum personally proposed to replace the core virtual machines that underpin the entire ecosystem, this was not evolution, but awareness of a design bottleneck that could not be improved in an incremental way.
The background of this proposal is that the Ethereum Foundation has recently undergone a round of leadership adjustments, and the controversy and criticism of the future direction of Ethereum in the community is also heating up.
Will Ethereum be the “missed opportunity”?
Ethereum’s current dilemma stems in part from its Rrollup centralized expansion strategy.The core concept of this strategy is to transfer transactions from the main chain by building a Layer 2 expansion network, but still take advantage of the security of the Ethereum main chain.This has indeed alleviated congestion during peak periods of the network.But it also brings new challenges, such as reduction in ETH destruction and fragmentation of ecosystems.
However, according to the new co-executive director of the Ethereum FoundationTomasz Stańczakexpress,Community attention to Layer 1 expansion is increasing.Stańczak posted on X platform that the Ethereum Foundation will refocus on its near-term goals, mainly includingLayer 1 expansionAnd forLayer 2 expansion solution support.
At the same time, some giant whales began to buy at low levels while Ethereum prices were pulling back.April 23, blockchain monitoring platform Lookonchain found that two addresses are accumulating millions of dollars in ETH.And inApril 22Lookonchain also found another wallet fromSince February 15, more than US$100 million of ETH have been purchased.
ETH’s current price has been from December last yearMore than $4,000Retracement at a high level, butApril 23The rise exceeded the day10%,return$1,800 or more.
Standard Chartered Bank recently wrote a letter to clients.Cut 2025 ETH price forecast from $10,000.However, for whales currently laid out on dips, ETH still has upward potential—The bank still maintains its year-end price target of $4,000.
Director of Digital Assets Research, Standard Chartered BankGeoff KendrickThis more conservative outlook expectation is mainly due to the structural weakness of Ethereum.He pointed out that the fee income that should have been obtained from the main chain has now been “diverged” by a large number of Layer 2 networks, which also weakens the main chain’s economic model.
