Institutions Break Up With Ethereum But Keep ETH On The Hook
Institutions Break Up With Ethereum But Keep ETH On The Hook
https://cointelegraph.com/news/institutions-breakup-ethereum-keep-eth-on-hook
Ethereum is entering one of its most precarious periods since its inception. Usage on the base layer is plummeting, core metrics are nearing multi-year lows, and even co-founder Vitalik Buterin is proposing a radical architectural overhaul.Â
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Institutions arenât waiting to see how it plays out. Blockchain data shows that long-time supporters such as Galaxy Digital and Paradigm have been slashing their Ether holdings in recent weeks.Â
So far in April, Ethereumâs base-layer activity has continued to collapse. Ethereumâs https://cointelegraph.com/news/ethereum-fees-drop-five-year-low-user-lull
.
But the story isnât entirely about Ethereumâs collapse. Some whales are treating this downturn as a rare buying opportunity. Even those who are selling Ether canât fully let it go.
Ethereum gets dumped by institutions, but for how long?
Institutions are dumping Ethereum, but itâs the ex they keep checking on. Itâs not entirely out of the picture â just benched while they explore options like Solana.
In recent weeks, blockchain analysts on the lookout for large crypto movements spotted several institutions moving ETH out of their tagged wallets, likely to sell. Lookonchain https://x.com/lookonchain/status/1914492078236811451
 that Galaxy Digital deposited 65,600 ETH ($105.5 million) to Binance. The investment firmâs Ether exposure rose to as high as around 98,000 coins in February, but that has dropped to almost 68,000 ETH at the time of writing, Arkham data shows.
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Galaxy dumps Ether, but not all of it. Source:Â https://intel.arkm.com/explorer/entity/galaxy-digital
Galaxyâs holdings may have declined in recent weeks, but theyâre still higher compared to the start of the year. Its Ether holdings reflect a broader trend seen in Ethereum-based investment products. https://blog.coinshares.com/volume-230-digital-asset-fund-flows-weekly-report-c905b0aeed15
 to CoinShares, ETH funds saw $26.7 million in outflows over the past week, bringing total outflows to $772 million over eight weeks. However, year-to-date flows remain positive, with $215 million in net inflows.Â
As Galaxy trimmed its Ether holdings, it also withdrew 752,240 SOL ($98.37 million), Lookonchain reported. Ethereum https://cointelegraph.com/news/solana-activity-flips-ethereum-memecoin-frenzy
, bots and low-quality tokens, it also served as a technical showcase for Solana â proving its ability to process massive transaction volumes without major fee spikes or outages.
Paradigm is another investor that has cut back on Ether. On April 21, it https://etherscan.io/tx/0x5fea654ea6954cc8921c2ad2c5b5fb0a970b1990b77117ed3f513a3bc65a1520
.
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Paradigm Capital held about 236,000 ETH in 2019 but holds 2,873 ETH on April 23. Source:Â https://intel.arkm.com/explorer/entity/paradigm-capital
âWhile institutional investors initially bought into the âultra-sound moneyâ narrative, theyâre now facing a reality where decreasing protocol revenue and weakening tokenomics create legitimate concerns,â Jayendra Jog, co-founder of Sei Labs, told Cointelegraph.
Ethereum returns to net inflationary state
Ether deflation has been an attractive selling point to Ethereum investors. It was integrated into the network through two major upgrades. First, the https://cointelegraph.com/news/ethereum-london-hard-fork-goes-live
, Ethereum became a proof-of-stake network and drastically cut new token issuance.
Etherâs supply consistently decreased following the Merge until April 2024, when Etherâs inflation began to accelerate. By early February 2025, the total ETH supply had surpassed its Merge level.
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Etherâs total supply is approximately 186,705 ETH higher than it was at the time of the Merge. Source:Â https://ultrasound.money/?timeFrame=since_merge
Part of Etherâs inflation has been due to dropping fees, which results in less Ether burned. According to data from IntoTheBlock, Ethereum collected 1,873.52 ETH in fees from April 14 to April 21. Thatâs slightly higher than the 1,697.61 ETH in fees from the week starting on March 17, which was the lowest amount of fees collected (measured in ETH) since July 31, 2017.
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Ethereum base layerâs fees drop to 2017 levels. Source:Â https://app.intotheblock.com/coin/ETH/deep-dive?group=network&subgroup=feesStats
Buterinâs radical RISC-V proposal for Ethereum
On April 20, Buterin proposed the https://cointelegraph.com/news/vitalik-buterin-proposes-swapping-evm-language-risc-v
 contract language, aiming to improve the speed and efficiency of the networkâs execution layer. Some view the proposal as a white flag on the existing architecture.
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Source:Â https://x.com/0xrooter/status/1914145769365573871
âVitalikâs RISC-V proposal is essentially an acknowledgment that the EVMâs fundamental architecture has reached its limits. When Ethereumâs founder proposes replacing the core VM that underpins the entire ecosystem, it signals not evolution but recognition of a design limitation that canât be incrementally improved,â Jog said.
Cointelegraph has reached out to the Ethereum Foundation and will update this article when it answers.
The proposal follows a https://cointelegraph.com/news/ethereum-foundation-announces-new-leadership
 following rising complaints on the projectâs direction.Â
Could Ethereum be the one that got away?
Part of Ethereumâs struggles has been attributed to its rollup-centric approach to scaling its network. The idea was to build layer-2 scaling networks that would offload the transactions from the base chain but still utilize its security. That has alleviated congestion issues during times of high network demand but has also created new problems of its own, such as dropping Ether burns and fragmentation of the Ethereum ecosystem.
But there is https://cointelegraph.com/news/ethereum-foundation-user-experience-layer-1-scaling-leadership-shift
, according to Tomasz StaĹczak, the new co-executive director of the Ethereum Foundation. StaĹczak said on X that the Ethereum Foundation will shift its focus to near-term goals, such as layer-1 scaling and layer-2 scaling support.
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Source:Â https://x.com/tkstanczak/status/1914092488396091444
Some whales have taken advantage of Ethereumâs cheaper price tag. On April 23, Lookonchain https://x.com/lookonchain/status/1914880004992983301
.Â
In a recent client letter, Standard Chartered Bank slashed its 2025 price estimate for Ether from $10,000. However, for whales accumulating at current levels, upside potential remains, as the bank still predicts a year-end target of $4,000.
Geoff Kendrick, the bankâs head of digital assets research, https://cointelegraph.com/news/standard-chartered-drops-2025-eth-price-estimate-by-60-to-4-k
 to Ethereumâs structural decline, noting that the layer-2 networks designed to improve scalability are now extracting much of the fee revenue once captured by the base layer.
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Thu, 04/24/2025 - 14:05
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