Could Ethereum Price Pump to $5,000 Despite 60% Losses in 2025?

Key Insights:

• Ethereum price is weak after a 60% drop from the 2025 high. Ethereum network usage stays strong, though.
• Ethereum + L2s control about 65% of total DeFi TVL.
• Big banks and asset managers keep building on Ethereum (tokenized funds, rollups, stablecoins).
• Buterin is pushing base-layer scaling, ZK-EVM, and quantum-resistant upgrades.

Despite Ethereum price dropping by roughly 60% from this year’s high, the network is still a dominant player in the DeFi space. The onchain data suggests Ethereum network’s widespread adoption across both traditional finance.

Big banks and asset managers keep building on it, and yet the Ether crypto price has refused to reward that progress. That mismatch has left many investors irritated. However, a few observations suggest the possibility of a recovery to $2,000 and, eventually, a strong price rally.

Contracting Network Activity Caused Ethereum Price Drop

So far in 2026, Ethereum price has fallen about 36% from its New Year’s Day opening price. The market has watched the $3,000 level drift further away while the price slid back toward $1,900.

On the surface, that kind of move makes Ethereum look tired. Underneath, the network continues shipping upgrades focused on scaling, privacy, and long-term security. There are also plans for a world where quantum computing becomes a real threat.

ETH price action has also lagged the wider crypto market. In the first two months of 2026, the Ether crypto underperformed by roughly 9%. That matters because it weakens the argument that macro conditions alone explain the drop.

Ethereum’s onchain activity also cooled. Decentralized exchange volumes on Ethereum fell about 55% over the last six months, while Solana’s volumes dropped a smaller 21% in the same period.

Ethereum price news: DEX Volume and App Revenue Insights on DeFiLlama

You can see the slowdown in the numbers. Ethereum’s DEX activity fell to about $56.5 billion in February 2026, down sharply from roughly $128.5 billion back in August 2025. Solana cooled off too, but less dramatically. It dropped to around $95.5 billion in February from about $120.6 billion in August.

With fewer swaps, Ethereum collected fewer fees, and some apps earned less revenue. In the short run, that reduces the immediate, practical reasons some traders hold ETH.

Ethereum Network Leads with Total Locked Value of 57%

The trading volume doesn’t tell the full story. The bigger test is where people actually park their money, and that’s still Ethereum price action’s home turf.

Ethereum network commands roughly 57% of all value locked in DeFi, about $52.4 billion. Add its major layer-2 networks like Base, Arbitrum, Polygon, and Optimism, and that leads to around 65%.

Meanwhile, Solana is closer to $6.4 billion, and BNB Chain sits around $5.5 billion. That gap is not a small lead. It is a different league. That’s also where institutions have voted with their feet.

Big finance hasn’t walked away from Ethereum. Firms like JPMorgan Asset Management, Citi, Deutsche Bank, and BlackRock have already launched pilots or run tests on the network. They’re trying everything from tokenized funds to their own rollups, and even early stablecoin-style experiments.

Ethereum also dominates real-world assets onchain, with an estimated 68% share. That reinforces Ethereum’s role as the default settlement layer for serious finance pilots.

Critics often point to Ethereum’s decision to push scaling onto rollups. Some call it a mistake, especially since chains like Tron and Solana have recently led in fee generation. However, no rival has consistently matched Ethereum’s combined economic weight across L1 and L2.

Even standout platforms in this cycle, such as Hyperliquid, still sit far below Ethereum’s scale, with TVL around $1.5 billion.

Vitalik Buterin Hopes to Cut Down Reliance on Rollups

Vitalik Buterin has also signaled a shift in emphasis. He has argued for reducing reliance on rollups over time by improving base-layer throughput. His proposed direction includes parallel block verification, gas pricing that better reflects real execution costs, and a move toward a zero-knowledge Ethereum Virtual Machine, often described as a ZK-EVM.

He has also supported a gradual rollout, starting with a smaller portion of the network before moving toward systems that require stronger proof-based confirmations.

At the same time, Ethereum is already thinking ahead to a future in which quantum computers could pose a real problem. Buterin has said there are no easy fixes. The strongest quantum-safe signatures are usually bigger, slower, and harder for the network to check.

Buterin also noted that the most talked-about options today, like lattice-based methods, still feel clunky and inefficient. The workaround focuses on protocol-level proof and signature aggregation, along with better mathematical tools within the protocol to reduce verification costs.

Ethereum is not perfect, and the Ethereum price action has tested patience. But the network’s advantage is not hype. It is time, trust, tooling, and institutional momentum.

Decentralization takes years to earn, not weeks to market. If sentiment swings back in crypto, Ethereum still looks like the chain most prepared to absorb the next wave of high-value, institutional-grade onchain demand.

The post Could Ethereum Price Pump to $5,000 Despite 60% Losses in 2025? appeared first on The Coin Republic.