The Company Managing Billions of Dollars Reveals the "Sole Event" That Will Save Ethereum!

According to market value, Ethereum, the second largest cryptocurrency, has faced significant challenges in the current crypto cycle. However, according to a recent investor note from VanEck, new initiatives could pave the way for a potential recovery.

VanEck's Director of Digital Assets Research, Matthew Sigel, and Senior Digital Assets Analyst, Patrick Bush, highlighted Ethereum's declining market position in their report.

Analysts wrote, "Ethereum has struggled in the current crypto cycle both in terms of utility and asset valuation," and added: "This decline is largely due to the erosion of the fundamental factors that once made Ethereum valuable."

Competing networks like XRP and Solana have gained attention over the past year, leaving Ethereum behind. One of the main reasons for this shift is Ethereum's scalability approach, which has led to fragmentation of liquidity and loss of market dominance in on-chain crypto trading.

Ethereum's scaling strategy has focused on encouraging users to move to various layer 2 networks such as (mainnet) Arbitrum and Base, offering lower transaction costs and higher efficiency. However, this approach has resulted in liquidity spreading across multiple chains, making trading less seamless compared to rival networks like Solana.

However, Solana has gained a significant market share by offering a single-chain ecosystem with high transaction speeds. A significant portion of Solana's revenue, approximately 80%, came from memecoin trading, which encouraged user adoption. As a result, overall usage of Ethereum declined and its deflationary tokenomics weakened.

According to VanEck's report, Ethereum's network revenue dropped by 93% last year. The network's share of total block chain revenue also decreased significantly from 55% in February 2024 to only 24% in February 2025.

In addition to these issues, the Ethereum Foundation, a non-profit organization supporting the development of Ethereum, came under criticism for its management style. Furthermore, co-founder Vitalik Buterin sparked controversy recently with a social media post referencing communism.

Despite Ethereum's troubles, VanEck analysts pointed to the Pectra update, planned as a potential turning point.

Pectra will offer several significant improvements, including a wallet recovery mechanism, account abstraction, and enhanced efficiency for Ethereum verifiers. Most importantly, the upgrade will double the number of 'blob' that Ethereum can process.

Blobs are large transaction data packets sent from layer 2 networks to Ethereum. Increasing the number of blobs is expected to reduce transaction fees and improve network efficiency. This change could make Ethereum more competitive against faster and cheaper alternatives like Solana.

The Ethereum Foundation has also proposed a new transaction method called "intents." Instead of users manually bridging assets between different layer 2 solutions, they will send a desired outcome and a resolver network will compete to execute it most efficiently. If successful, this could eliminate the need for inter-chain bridges, which have been a security vulnerability leading to the theft of billions of dollars in assets.

Despite the adoption of Ethereum and significant declines in its revenues, the upcoming Pectra upgrade and new transaction mechanisms may help reverse the downward trend. Industry experts, including Ethereum Foundation researcher Justin Drake, acknowledge the urgency of the situation.