A month into 2025, Ethereum faces growing uncertainty despite its established dominance in the smart contract space. While ETH registered notable gains in 2024, it lagged behind major competitors like Solana, XRP, and SUI, raising concerns about its ability to maintain market leadership.
The Ethereum Foundation also had a challenging year, dealing with transparency issues, leadership shifts, and increasing skepticism from the community. With experts divided on Ethereum’s future, the question remains: Does it still offer strong investment potential, or are alternative ecosystems becoming more attractive?
Ethereum is Lagging Behind Major Competitors
In 2024, Ethereum ended the year with a 63% gain, but this was far below its major competitors. Bitcoin rose 123%, BNB climbed 134%, and Solana surged 138%.
Smaller players like Hedera (300%), XRP (335%), and SUI (555%) outperformed significantly, suggesting that capital flowed into alternative ecosystems with higher returns.
Price Change for Ethereum and some of its major competitors between January 1, 2024, and December 30, 2024. Source: Messari.
Ethereum and Hedera were also the only assets in this group that failed to reach a new all-time high. Ethereum’s peak in 2024 barely exceeded $4,000, still well below its 2021 record of $4,864.
Fees In the Last 30 Days for Different Chains, Protocols, and Applications. Source: DeFiLlama.
When analyzing fees generated in the last 30 days, Ethereum is on the verge of leaving the top 10, with $133 million in fees, just ahead of Pumpfun ($123 million).
Notably, five of the top 10 are Solana-based, including Jito, Raydium, Meteora, and Pump, which, along with Solana itself, have all generated more fees than ETH.
Ethereum Foundation Suffered a Lot of Criticism Last Year
Last year was tough for the Ethereum Foundation, facing heavy criticism on multiple fronts. Issues began when key members took advisory roles at EigenLayer, one of Ethereum’s most hyped projects. The foundation was also called out for a lack of transparency after a $100 million transfer to Kraken.
Further controversy arose when reports suggested that the foundation was selling ETH every 11 days, prompting Vitalik to defend its neutrality and reject staking ETH.
“We are indeed currently in the process of large changes to EF leadership structure, which has been ongoing for close to a year. Some of this has already been executed on and made public, and some is still in progress,” Buterin posted on X (formerly Twitter) back in January.
Recently, Vitalik hinted that the foundation might reconsider ETH staking to cover expenses. On January 18, he announced “large changes” to the leadership structure, aiming for stronger technical expertise and better communication with developers, users, and Layer 2 projects. Despite this, the community remains skeptical, with ETH down 17.5% since his statement.
With ongoing leadership changes, financial concerns, and transparency issues, some in the community see the Ethereum Foundation as directionless.
Confidence in its long-term vision appears shaky, and uncertainty around Ethereum’s next development phases could be weighing on sentiment.
Experts Show Mixed Sentiment About the Future of Ethereum
On X, opinions on Ethereum are divided. Max Resnick, Lead Economist at Anza, suggests Uniswap may have missed an opportunity by not launching on Solana.
He highlights that Raydium, a Solana-exclusive DEX, is now generating more volume and fees than Uniswap, despite Uniswap operating across multiple chains.
“Probably the best advice you could’ve given uniswap 6-12 months ago would have been to launch on Solana as soon as possible. Influential people, some of whom I think are very smart and respect told them to launch the 1000th Ethereum L2. This is the result,” Resnick wrote.
Anton Bukov, co-founder of 1Inch, takes a different stance, praising Ethereum and its Layer 2 solutions for their simplicity and developer-friendly environment.
“Despite market uncertainty about leading smart contract platforms, I am pretty sure it’s still obviously the most popular and simple platform for developers – Ethereum and its L2s,” Bukov wrote.
Crypto investor Ted Pillows remains optimistic, pointing to potential catalysts for Ethereum, such as a Trump administration and the possibility of an Ethereum Staking ETF.
On the other hand, Crypto Data expert Kofi argues that the Ethereum Foundation should not be viewed as the face of Ethereum, reinforcing the idea that the network’s strength lies in its decentralized nature.
The EF does a lot of important work. People don’t realise it because the EF: – Don’t aggressively promote their work – Allow the teams they support to take full credit for wins This is intentional. The EF is not meant to be the face of Ethereum. The EF is supposed to steward the infinite garden, supporting an increasingly diverse network of contributors from the background. Until, one day, it’s no longer needed,” wrote Kofi.
To Sum It Up: Is ETH Worth Investing?
Ethereum’s struggles in 2024 signal a troubling trend for its future as competitors like Solana, XRP, and SUI continue to capture market share with higher returns, lower fees, and better scalability.
The Ethereum Foundation’s ongoing transparency issues, leadership turmoil, and lack of clear direction only add to the uncertainty, making it less attractive for investors seeking stability.
With Solana-based applications now outpacing Ethereum in fee generation and innovation shifting elsewhere, Ethereum’s relevance as the leading smart contract platform is no longer guaranteed.
Unless it addresses these challenges quickly, ETH may no longer be the best investment choice in 2025.
