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Olga Kharif writes on how the plunge in the value of Ether is highlighting the debate around the prospects for the second-largest cryptocurrency.
Fundamental questions
The crypto selloff is deepening — and no one’s sure where the bottom is. Bitcoin has dropped more than 40% from its all-time high. Ether, the token of the Ethereum network, just fell to its lowest level since May 2025. A wave of ETF redemptions, forced liquidations, and broad risk-off selling is ripping through digital assets, and some of the industry’s core narratives are crumbling with prices.
Bitcoin hasn’t held up as a hedge against inflation. It hasn’t acted as a haven during geopolitical stress. And it’s lost steam as a momentum trade. That breakdown is bleeding across the market — including Ethereum, where Ether price is plunging, the technical roadmap is under debate, and the financial strength of its biggest backers is suddenly in question.
Ether is the second-biggest coin after Bitcoin, but the network it underpins plays a very different role. While Bitcoin has been touted as a digital version of gold – a label it has failed to live up to — Ethereum functions more like internet infrastructure. Developers use it to build decentralized applications, financial tools, and to launch other crypto assets — including stablecoins and NFTs. It powers much of what’s referred to as “Web3.” The price of Ether reflects both usage of the network and market speculation — which is why adoption can rise even when prices fall.
One of the biggest forces behind that trade is Tom Lee’s BitMine Immersion Technologies. The company disclosed this week that it holds 4.3 million Ether, making it the largest known holder of the token. BitMine is structured like an Ethereum treasury — it tracks the token’s price, earns rewards by helping secure the network (“staking”), and aims to outperform over time. But as prices have fallen, so has confidence in the model.
Lee took to X this week to defend the setup. Some traders have warned that BitMine may have to stop buying Ether and is faced with a mountain of unrealized losses. Lee pushed back: “It’s not a bug — it’s a feature,” he posted. He compared BitMine to an index fund. If the market goes down, so does the value of the assets it holds — but that doesn’t mean the strategy is broken. “Shall we call out all index ETFs for their losses?” he wrote, adding that Ethereum is still the future of finance.
The concern is whether BitMine can keep playing its role. “On the institutional side the main driver for ETH was Tom Lee buying billions of ETH and he is now out/low on cash,” Tommy Shaughnessy of Delphi Ventures posted on X. “He is sitting on $7B in unrealized losses and the stock is trading at a discount to NAV so he won’t be able to raise or buy more ETH anytime soon if ever.”
At the same time, Ethereum is facing internal tension. Last week, co-founder Vitalik Buterin proposed major changes to the network’s long-term design — sparking concern from some developers. Steven Goldfeder of Offchain Labs, which works on a blockchain that sits on top of the Ethereum platform, called into question Buterin’s ideas.
Yet usage is still rising. According to tracker Etherscan, daily activity on Ethereum is hovering near record highs. JPMorgan recently launched a deposit token on Base, a blockchain built on top of Ethereum. Fidelity used Ethereum to issue a stablecoin. Lee posted a chart showing the gap — more usage, falling price.
“We are seeing so much adoption all at the same time happen, the fundamentals are as good as they’ve ever been,” said Vivek Raman, co-founder of Etherealize, a company helping institutions develop on top of Ethereum infrastructure.
Some argue this drop isn’t about Ethereum’s tech at all — it’s about how closely it trades with stocks and other risk assets. “Anyone selling right now is not doing so because of a change in their fundamental view of the Ethereum network,” said Edward Chin, co-founder of Parataxis Capital. “Rather, this looks to be driven by equity market correlation and general risk-off sentiment.”
But fundamentals may no longer be the point. With crypto ETFs seeing outflows, retail investors sidelined, and leveraged trades unraveling, the whole market feels like it’s in freefall. Ethereum’s usage may be growing, but its future direction — and the financial health of the players meant to back it — is under pressure. In a market where adoption no longer guarantees price, crypto is still searching for something more stable: a center of gravity, and a reason to matter. That’s true of Bitcoin. And it’s true of Ether, too.
Charting it out
Once pitched as “digital gold” and a higher-octane counterpart to the Nasdaq and S&P 500, the world’s largest cryptocurrency now lags all three over the past five years after its recent ferocious rout.
Counting it out
25%
Gemini Space Station, the crypto exchange run by billionaires Tyler and Cameron Winklevoss, is slashing as much as 25% of its workforce and winding down operations in the UK, European Union and Australia, marking a major pullback for two of the industry’s most high-profile figures amid a rout in the sector.
Hearing them out
“The fear and uncertainty across the market is evident. Without conviction-based buyers willing to lean into the selling, each wave of ETF redemptions and liquidation cascades.”
Chris Newhouse
Head of business development at Ergonia.
Bitcoin tumbled as the unwinding of leveraged bets and broader market turbulence deepened a selloff that has wiped out all of the gains since President Donald Trump’s election.
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The Bitcoin slump haswiped out all of Bitcoin’s gains since the election of President Donald Trump. Bloomberg’s Muyao Shen reports.
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