Ethereum (ETH) has been struggling significantly throughout 2025, facing numerous challenges that have hindered its progress compared to Bitcoin (BTC), Solana (SOL), and XRP. Once considered a serious contender to Bitcoin’s dominance, Ethereum has seen its market cap decline while its rivals have surged ahead.

Ethereum’s Declining Performance

Ethereum’s poor performance in 2025 has been particularly notable. ETH has dropped by 44% year-to-date (YTD), falling from a high of $3,600 in January to around $1,800. This decline has led Ethereum to lose ground, not only against Bitcoin, which has risen by 30% over the past year, but also against its competitors like Solana and XRP. Over the past year, Ethereum’s value has declined by 47%, while Solana and XRP have seen significant growth. Solana, for instance, has attracted a growing developer base and recorded an 83% year-on-year growth, particularly within the cryptocurrency sector.

XRP has also outperformed Ethereum, experiencing a 249% increase in its price and a market cap growth from $30 billion to $127 billion. As a result, Ethereum’s market dominance has steadily declined from 17% to just 7.9%, highlighting the rise of its competitors.

Developer Exodus and Leadership Concerns

One of the primary reasons for Ethereum’s struggle appears to be issues with leadership and innovation. Ethereum’s development ecosystem has suffered a noticeable decline, with the number of active developers dropping by 17% in 2024. In contrast, Solana has gained momentum, becoming a hub for developers and emerging projects. Ethereum’s inability to maintain its development pace and adapt to changing dynamics in the crypto space has raised concerns among investors and stakeholders.

A key issue highlighted by analysts like Ryan Watkins is Ethereum’s leadership, particularly the role of founder Vitalik Buterin. Watkins pointed out that Ethereum’s leadership failed to capitalize on its earlier momentum. Ethereum’s vision of complete decentralization, while appealing to some, has hindered the network from forming alliances with political figures or lobbying in Washington, D.C., unlike other blockchain projects. Buterin’s reluctance to engage with political leaders and government structures has left Ethereum isolated, while competitors like Solana and Ripple have successfully navigated the regulatory environment.

ETH’s Unattractiveness to Investors

This lack of leadership has contributed to Ethereum’s growing unattractiveness to investors. According to the Sharpe ratio, Ethereum has become a riskier investment, with its returns declining over the past year. The Sharpe ratio, which measures risk-adjusted returns, has dropped to -0.69, signaling that Ethereum is offering lower returns with higher risks compared to risk-free assets.

In addition, Ethereum is facing strong downward pressure, with its price continuing to decline. As of the latest data, ETH is trading at $1,839, marking a 2.11% drop over the past 24 hours and an 8.39% drop over the past week. The Stochastic RSI on the 1-day chart indicates a continuation of this bearish trend, with a recent crossover signaling further downward momentum.

What’s Next for Ethereum?

For Ethereum to recover, it needs to regain investor confidence and reclaim important price levels. If the downtrend continues, ETH could dip further, potentially reaching $1,761. On the other hand, a bullish outlook for Ethereum will require the altcoin to reclaim the $2,000 mark and hold above it for a sustained period.

Ethereum’s future will largely depend on its ability to adapt, innovate, and re-establish itself as a leader in the crypto space. Whether it can reverse its fortunes remains uncertain, but for now, it’s facing stiff competition and internal challenges that are slowing its progress.