I. Introduction: A Breakout Signal Amid ETH’s Price Slump?

Since 2024, ETH’s price growth has noticeably lagged behind BTC and SOL, deviating sharply from market expectations. While Bitcoin showed remarkable strength, Ethereum faced growing competition from emerging Layer-1s like Solana and Sui, and Layer-2s such as Base and Arbitrum, which drew liquidity and attention away. At the same time, declining mainnet usage slashed Ethereum’s fee income and ETH burn rate, undermining price support. This was compounded by the underwhelming launch of Ethereum spot ETFs and limited institutional adoption.

In this BTC-dominated cycle, Ethereum has struggled to gain momentum. Within the community, frustration has grown over governance and strategy missteps tied to the Ethereum Foundation (EF) — including indecision, centralized control, poor transparency, organizational bloat, and short-term thinking. Although EF announced a strategic restructuring in June 2025, skepticism remains high.

In response, Ethereum core developer Zak Cole launched the Ethereum Community Foundation (ECF) at EthCC 8 in Cannes, France, in July 2025 — boldly declaring: “ETH reaching $10,000 isn’t a joke — it’s a necessity.” Cole stated that ECF will “say what EF dares not say and do what EF is unwilling to do,” with a focus on financially backing the Ethereum ecosystem and pushing ETH toward that $10K target. This move reflects growing dissatisfaction with EF’s governance and has triggered intense debate over ECF’s role in shaping Ethereum’s future.

This article explores the roots of ETH’s stagnation, unpacks the goals and strategies of ECF, compares its vision to EF’s governance model, and assesses how ECF might influence Ethereum’s ecosystem and ETH’s valuation. Finally, it reviews market responses and outlines Ethereum’s potential future trajectory.

II. Why Is ETH Lagging? — Five Factors Behind ETH’s Price Stagnation

Source: https://www.tradingview.com/symbols/ETHBTC/

Throughout 2025, the ETH/BTC price ratio steadily declined, reaching a short-term low of 0.01867 on May 25. By July 10, it had recovered slightly to 0.02493, but this still reflects a 52.8% drop year-over-year.

Ethereum’s underperformance in this cycle can be traced to five key factors:

1. Economic Model and Impact of Network Upgrades

Technologically, the Dencun upgrade in March 2024 marked a major shift in Ethereum’s economic model. With the introduction of blob transactions, Layer-2 transaction costs dropped sharply, driving a mass migration to networks like Polygon and Optimism. This exodus drained liquidity and demand from Ethereum’s mainnet, causing fee income to collapse by over 99%.

As mainnet fees fell, ETH burning slowed dramatically, turning Ethereum from a deflationary to an inflationary asset, which weakened long-term price support. Transaction volumes on the mainnet also hit multi-year lows, raising concerns about the true impact of the Dencun upgrade.

Looking ahead, the Pectra upgrade in 2025 aims to improve staking efficiency, smart contract performance, and scalability. However, it has yet to restore market confidence. So far, Ethereum’s recent upgrades have had unintended negative effects — reduced ETH burning, increased supply, and continued price pressure.

2. Market Risk Aversion and ETF Capital Flows

Since late 2024, rising global volatility triggered a flight to safety, which weighed heavily on the crypto market. Historically, ETH experiences deeper drawdowns than Bitcoin during downturns. According to Grayscale, ETH’s average decline has been 1.2 times greater than BTC’s — but in this cycle, that ratio widened to nearly 1.8 times.

Ethereum’s spot ETF launch initially drew strong inflows, but investor interest faded sharply in early 2025. Bitcoin maintained its position as the preferred asset, leaving ETH overshadowed. While ETH inflows picked up slightly from late April, they still trailed far behind BTC.

As of July 10, 2025, U.S. Bitcoin spot ETFs held approximately $137.5 billion in assets, compared to just $11.4 billion across Ethereum spot ETFs, underscoring weak institutional demand for ETH.

Source: https://www.coinglass.com/eth-etf

3. Intensified Competition and Fragmented Market Attention

Market attention has recently fragmented across emerging narratives, weakening Ethereum’s dominance. The U.S. government’s announcement to build Bitcoin reserves, along with state-level BTC endorsements, drew significant investor capital and focus. At the same time, Solana (SOL) and Binance Chain (BNB) surged on the back of the meme coin boom, driving rapid price growth.

Speculative flows also shifted to newer chains like Base, Sui, and Tron, further diverting attention from Ethereum. In contrast, Ethereum lacked breakout projects capable of reigniting market excitement — especially with innovation in DeFi cooling down.

While Ethereum’s Layer-2 networks (such as Arbitrum and Optimism) helped address scalability, they also fragmented the ecosystem, reducing mainnet activity and dispersing investor focus even further.

Source: https://dune.com/Henrystats/ethereum-vs-solana

4. Limited Institutional Demand and Interest

Institutional capital remains heavily concentrated in Bitcoin, with Ethereum largely overlooked by mainstream institutions and governments. Most national reserves and major institutional portfolios continue to favor BTC, allocating minimal exposure to ETH.

While there are isolated cases of institutional adoption — such as Bit Digital, a New York-listed firm, which announced in July 2025 that it had fully shifted from BTC to ETH with the goal of becoming the largest publicly listed ETH holder — such moves are rare and mostly limited to smaller, crypto-native firms.

Other mid-sized players like BTCS and Sharplink Gaming have begun staking ETH, but their impact on broader market sentiment is limited.

In short, the lack of ETH exposure in large institutional holdings and government reserves significantly caps Ethereum’s upside. The market continues to reflect a clear institutional preference for Bitcoin, directly limiting both demand and price appreciation potential for ETH.

5. Whale Selling Pressure and Liquidity Uncertainty

Recent market trends show intensified ETH sell-offs by major holders, including Jump Crypto, Paradigm, and Golem Network — entities that once collectively held over $1.5 billion in ETH. Parts of these assets were moved to exchanges and liquidated, adding to sell pressure and weakening market confidence.

Meanwhile, fluctuations in Ethereum’s staking yield and changes in the active validator count signal instability in ETH’s circulating supply and liquidity structure. This evolving supply-side uncertainty fuels price volatility, further dampening short-term sentiment.

In summary, Ethereum’s recent underperformance is driven by a mix of:

• Changes in its economic model,
• Broader macroeconomic and leverage risks,
• Heightened Layer-1 and Layer-2 competition,
• Muted institutional participation, and Liquidity uncertainty.

These factors together explain why ETH has stalled compared to the broader crypto market.

III. The Mission of ECF and Comparison with EF

The Ethereum Community Foundation (ECF) enters with a market-driven strategy, aiming to elevate ETH’s position as a core digital asset by leveraging financial tools and targeted policies. With a bold mission statement, ECF asserts its commitment to “serve ETH holders by saying what the Ethereum Foundation won’t — and doing what it won’t do.”

Firmly aligned with the ambitious $10,000 ETH price target, ECF argues that a higher ETH valuation is not just aspirational but necessary — to strengthen network security, enhance ecosystem resilience, and preserve long-term asset value.

1. Mission and Strategic Positioning of ECF

ECF has raised millions in ETH from anonymous holders and community donors, operating under strict principles: promote ETH burning, issue no additional tokens, and preserve immutability. Its funding is exclusively directed toward mainnet-deployed projects that directly increase ETH burn and strengthen the Ethereum ecosystem.

• High-Burn Applications: Funding high-volume on-chain projects such as financial derivatives and tokenized real-world assets (RWAs), generating substantial transaction fees to boost ETH burning and price.
• Accelerating Institutional Adoption: Offering integrated Ethereum solutions to banks and corporations, positioning Ethereum as the global financial settlement layer and attracting traditional capital.
• Community Governance Empowerment: Establishing the Ethereum Validator Association (EVA) and implementing token-based voting, granting validators greater influence over protocol upgrades and fund allocation.
• Transparent Funding Mechanism: Ensuring all funding decisions are 100% transparent and community-approved via token voting, directly addressing criticisms of EF’s opaque operations.

ECF focuses on infrastructure development, ETH value growth, maximized ETH burning, transparency, and institutional engagement. By enhancing core infrastructure, engaging regulators, and optimizing “blob space” pricing, ECF aims to strengthen Ethereum’s underlying economic model.

2. Key Differences Between ECF and EF

• Goal Orientation: ECF explicitly prioritizes ETH price appreciation as critical for network security, whereas EF traditionally focuses on long-term ecosystem and technical development without direct price orientation.
• Funding Principles: ECF mandates “no tokens, promote ETH burning, immutability.” Conversely, EF historically supported ecosystem projects (Uniswap, ENS, Optimism) that eventually issued their own tokens, criticized by ECF as economic feudalism.
• Governance Model: ECF emphasizes full transparency, employing community-driven funding decisions and public disclosures. EF, as a traditional nonprofit, operates through centralized committees and is frequently criticized for opaque, centralized decision-making.
• Ideological Stance: ECF openly represents “ETH-centric capitalism,” prioritizing holder interests, while EF advocates credible neutrality, focusing on long-term protocol neutrality without explicit price targets.

Overall, ECF presents a clear challenge to EF’s traditional governance, sparking debate across the Ethereum community — between prioritizing public goods and driving asset valuation. This tension may significantly shape Ethereum’s future direction.

IV. Potential Impact of ECF on Ethereum Network and ETH Price

If successfully implemented, the Ethereum Community Foundation’s (ECF) initiatives could reshape Ethereum’s ecosystem and materially impact ETH’s price across multiple dimensions.

Impact on Ethereum’s Network Ecosystem

• Infrastructure and Technological Enhancement
  ECF’s emphasis on public-good infrastructure projects, such as optimizing blob space pricing, aims to enhance Ethereum’s mainnet performance and improve Layer-2 interoperability, thus strengthening the broader Ethereum technology ecosystem.
• Increased On-chain Activity and ETH Burn
  If ECF successfully promotes high-volume on-chain applications like real-world asset tokenization, it will directly increase Ethereum mainnet transaction volume and gas usage. This will amplify the EIP-1559 burn mechanism, enhancing ETH scarcity and providing stronger price support.
• Governance Empowerment for Validators
  Through the proposed Ethereum Validator Association (EVA), validators will gain greater influence in protocol decision-making, particularly regarding network fees and upgrade priorities. This shift could significantly alter Ethereum’s governance landscape, decentralizing decision-making power and encouraging greater validator participation.
• Rebalancing the Relationship with Layer-2 Solutions
  By incentivizing Layer-2 solutions to utilize Ethereum’s native blob space rather than third-party data solutions, ECF could help maintain substantial Layer-2 activity anchored to Ethereum’s mainnet, thus mitigating the risk of mainnet marginalization and further fragmentation of liquidity.
• Long-term Ecological Transformation
  If ECF can successfully direct more developers toward non-tokenized public infrastructure projects, it could reshape the Ethereum DApp ecosystem’s value proposition. This strategic shift would encourage applications to return to Ethereum’s mainnet, solidifying ETH as the foundational economic asset and reinforcing Ethereum’s credible neutrality amid intense Layer-1 competition.

Impact on ETH Price

• Supply-Demand Fundamentals
  ECF’s strategy to promote substantial ETH burn and drive tangible use cases on Ethereum’s mainnet could positively shift ETH’s supply-demand dynamics. Increased deflationary pressure coupled with growing network utilization could create significant upward support for ETH’s price.
• Market Confidence and Price Expectations
  ECF’s bold declaration of a $10,000 ETH target sets a clear psychological benchmark for investors. Such explicitly stated price objectives can attract investor interest, renew market enthusiasm, and potentially reinvigorate positive sentiment toward ETH.
• Potential for Institutional Capital Inflows
  ECF’s goal of positioning Ethereum as a global financial settlement layer, combined with active engagement with traditional financial institutions, could facilitate greater institutional participation. Successful partnerships with enterprises and financial institutions — potentially enhanced through Ethereum-based business integrations or spot ETFs — could introduce considerable new demand and liquidity for ETH.
• Risks and Uncertainties
  However, emphasizing explicit price targets also carries risks. Regulatory scrutiny and skepticism from the broader market might arise if ambitious short-term goals are unmet, potentially dampening investor confidence. Moreover, the concentrated nature of ECF’s funding strategy might lead to excessive reliance on a limited set of projects, increasing market vulnerability to potential failures or controversies. Additionally, ECF’s key initiator, Zak Cole, previously involved in projects with less-than-ideal post-launch performance, introduces further uncertainty regarding the foundation’s ability to deliver tangible results.

ECF’s focus on public infrastructure, DeFi, and transparent governance offers a path to revitalize Ethereum. While these initiatives could enhance economic efficiency and ETH’s value, their success hinges on execution and community support. Broader market trends, regulation, and technical progress will remain key price drivers.

V. Conclusion and Outlook: Community Awakening or Mere Speculative Hype?

The emergence of the Ethereum Community Foundation (ECF) highlights a growing divide within the Ethereum community — reflecting both dissatisfaction with the status quo and differing visions for Ethereum’s future. Depending on one’s perspective, ECF is either a grassroots effort to reclaim decentralized governance and maximize ETH’s market value, or a speculative initiative tapping into community hopes for rapid price appreciation. Its bold positioning and outspoken goals speak directly to market anxieties around ETH’s underperformance — but whether these ambitions can be realized remains to be seen.

Looking ahead, the trajectory of Ethereum and ETH’s valuation will depend on several intertwined factors. A key driver is rising institutional involvement. Some public companies and financial institutions have started to treat ETH as a long-term strategic asset. Meanwhile, the upcoming Pectra upgrade — designed to improve data transfer efficiency and scalability — may boost adoption across AI and Web3 use cases, driving mainnet activity and increasing ETH burn rates. If ECF’s initiatives around real-world asset tokenization and infrastructure investment succeed, they could inject new momentum into Ethereum’s ecosystem and help reinforce ETH’s value.

Regardless of outcome, ECF’s emergence underscores an ideological split within the Ethereum community: between those pushing for aggressive value capture and those focused on long-term innovation and sustainable growth. The key will be whether ECF can deliver real impact through its framework of transparency, non-tokenization, and ETH-burning incentives. If successful, ECF may become a major force in ETH’s next growth phase. If not, its bold promises could be remembered as a fleeting market narrative with little lasting effect.

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