The Rise and Fall of Ethereum and Future Outlook

Since Bitcoin broke its historical high in 2024, Ethereum has been moving further away from its previous peak, and the market's skepticism towards it has been growing. By 2025, the price of Ethereum continues to decline, and market sentiment shifts from skepticism to despair. Early participants start to liquidate their positions, and former supporters have also wavered in their stance.

This article will review the rise and fall of Ethereum from five aspects and look forward to its possible future.

1. The Glory Years of Ethereum (2017-2022)

In July 2014, Ethereum launched its ICO. From 2014 to 2016, the price lingered below $10. In 2017, as the ICO boom arose, Ethereum began to shine. As of January 13, 2018, the price rose from $10 to $1430, setting an all-time high.

In early 2017 to 2018, over 2500 tokens conducted ICOs on Ethereum. During this phase, the main value of Ethereum lay in token issuance, becoming the only currency to participate in the ICO wave. Although other public chains have emerged, Ethereum still holds a dominant position in the ICO and smart contract markets.

The years 2018-2019 marked an era of multiple blockchains emerging. Many new public chains appeared, such as TON, ADA, Cosmos, Avalanche, and Solana. However, Ethereum still dominates the smart contract market.

In 2020, the summer of DEFI arrived, and Ethereum welcomed its moment of glory. Projects like Compound, Uniswap, Yearn.Finance, MakerDAO, and Curve exploded in the Ethereum ecosystem. From 2021 to 2022, new trends such as GameFi, SocialFi, and NFTs emerged one after another.

On November 10, 2021, Ethereum reached an all-time high of 4878 USD. However, with the increase in network load, performance issues became a bottleneck for development.

2. The Expansion Path of Ethereum (POS-Layer2)

The Ethereum scaling solution mainly includes transitioning to a POS mechanism and developing Layer 2.

On September 15, 2022, Ethereum officially transitioned to the POS mechanism. Layer 2 solutions have also evolved from early state channels and subnet explorations to later Rollup solutions.

However, Layer 2 has not become the savior of Ethereum. After each Layer 2 goes live, it not only fails to bring benefits to Ethereum but also continuously drains and backfires. Ethereum has become a nominal ruler, while the Layer 2s have turned into fiefdoms acting independently.

After switching to POS, Ethereum lost miner support, and ETH tokens also lost the basic manufacturing cost and price-bearing mechanism.

3. The Innovator's Dilemma of Ethereum

Ethereum has always been a leader in Crypto innovation. However, innovators often find themselves in a predicament. In order to optimize performance and meet existing demands, Ethereum has focused on scaling solutions while overlooking emerging disruptive technologies and market trends.

Other public chains such as TRON, BSC, and Solana are seizing opportunities and making breakthroughs in their respective fields. Ethereum is being surpassed by competitors.

4. The weakness of Ethereum reflects the industry's underdevelopment

The predicament of Ethereum also reflects the overall issues in the Crypto industry. Besides issuing assets and speculation, the industry seems to have yet to find a truly healthy development paradigm and more application value.

Before finding truly valuable applications, the industry may continue to cycle through the current model. If even memes lose their wealth effect, the market could fall into a prolonged bear market.

5. Future Outlook of Ethereum

Ethereum has lost its competitive barriers in terms of technology and models. The only advantage currently is the accumulated funds and a mature DEFI ecosystem. RWA may be an opportunity, but the road ahead is long and difficult.

Ethereum has lost its dominant position. Other public chains have also formed their own barriers. If Ethereum cannot improve its performance, maintain innovation, and retain developers, its status may decline further.

As former supporters of Ethereum, we still look forward to its continued innovation, launching more valuable applications and development paradigms. Only through continuous innovation can Ethereum maintain its competitiveness.