Ethereum has reached its lowest valuation against Bitcoin since May 2020, marking a significant downturn for the second-largest cryptocurrency by market capitalization. According to on-chain data, the ETH/BTC trading pair recently dropped to 0.023278, reflecting an 8.7% decline in just 48 hours. This drop comes as Ethereum struggles with broader market volatility, reduced liquidity, and increasing investor uncertainty.
The decline in Ethereum’s value is part of a larger trend that has seen the cryptocurrency lose approximately 43% of its total market value in 2025. CoinMarketCap data shows that since December 2024, Ethereum’s price has dropped by 42.9%, bringing its current value to $1,945 per token. Simultaneously, the total value locked (TVL) in the Ethereum network has plummeted from $74 billion in December to $45.8 billion, signaling reduced investor confidence in decentralized finance (DeFi) protocols built on Ethereum.
Market analysts attribute these declines to several factors, including macroeconomic instability and new U.S. trade tariffs targeting Canada, China, and Mexico. The tariffs triggered a wave of uncertainty across global financial markets, causing stock prices to tumble and fueling speculation about a possible trade war. This instability extended to the cryptocurrency sector, with most major digital assets experiencing sharp losses. Ethereum, however, has been hit harder than most, with its market cap shrinking at a more rapid pace compared to competitors like Solana and Binance Coin (BNB), which saw declines of 35.6% and 23%, respectively.
Further compounding Ethereum’s struggles, crypto liquidations surged past $900 million within 24 hours, with $202 million in ETH long positions being wiped from the network. This wave of liquidations began after Ethereum lost a key support level at $2,000, which had previously acted as a cushion against sell-offs. Stablecoin inflows into the Ethereum ecosystem have also slowed significantly in the past month, suggesting reduced capital rotation and weaker demand for Ethereum-based financial products.
Decentralized exchange (DEX) trading volumes have seen a decline from $92 billion in December to $82 billion in February, while futures trading on Ethereum has fallen from $31 billion to $18 billion over the same period. Additionally, Ethereum’s revenue took a massive hit, dropping from $193 million in December to just $26 million in February, according to DefiLlama data.
At the same time, SosoValue data indicates that spot Ether ETFs recorded outflows of $176 million in the past month, further underscoring reduced institutional demand for ETH. These trends suggest that investors are reallocating their capital away from Ethereum in favor of more stable assets or Bitcoin, which has demonstrated greater resilience during the recent market turbulence.
Adding to investor concerns, rumors have surfaced regarding the Ethereum Foundation’s financial stability. A wallet, allegedly linked to the foundation, recently deposited 30,098 ETH into the Maker vault, sparking speculation about a potential liquidation of foundation holdings. However, Ethereum developers Eric.eth and Sassal.eth quickly dismissed these claims, stating that the wallet in question does not belong to the foundation. Despite this, some traders speculate that the foundation could face over $100 million in forced liquidations if ETH’s price continues to decline.
The Ethereum Foundation’s financial disclosures indicate that its treasury was valued at $970.2 million as of October last year, a significant decline from $1.6 billion in March 2022. This drop is primarily attributed to the falling price of Ethereum, which comprises 81.3% of the foundation’s holdings. In December, the foundation exchanged 100 ETH for 374,334 DAI and sold 4,266 ETH throughout 2024 to secure additional yields. In January 2025, it invested 50,000 ETH—worth over $165 million—into Aave, aiming to generate returns as ETH’s price continued to drop.
These periodic sell-offs suggest that the foundation is actively managing its treasury to cover operational expenses. However, if Ethereum’s price continues its downward trajectory, the foundation may be forced to sell portions of its holdings at unfavorable prices. Some investors worry that if ETH falls below key support levels, the foundation may struggle to maintain its financial commitments, potentially leading to further liquidations.
Ethereum’s declining valuation against Bitcoin underscores a broader shift in market sentiment, with investors favoring BTC as a safer asset amid economic uncertainty. As regulatory challenges and macroeconomic factors continue to weigh on the market, Ethereum’s ability to recover will depend on renewed investor confidence, technological advancements, and its ability to maintain its position as a leading smart contract platform.
By Alejandro Silva Ramírez, Crypto Analyst & Columnist