Ethereum's Record-Breaking Rally Masks a Bigger Decline

Ethereum's recent price surge has raised questions about its long-term prospects. Despite a 33% gain in the past month, Ethereum is still down 16% for the year and significantly below its record high of $4,953.73 set last August.

The sharp rebound was driven by a broader macro recovery, Treasury buybacks, a short squeeze, and $697 million in inflows from US spot Ethereum ETFs between August 17-21, the strongest weekly inflow since October 2025.

However, this short-term rally masks a more concerning 12-month decline, driven by reduced fees generated on Ethereum's base layer due to the growth of layer-2 networks and delayed upgrades such as Glamsterdam. Solana has also captured more real-world asset issuance, including tokenized bonds and funds.

Ethereum still has support at $2,499, thanks in part to corporate accumulation by BitMine and average base-layer fees falling to $0.44 per transaction, down 99% from 2021 levels.