Key insights
- Ethereum's native token, Ether, has fallen significantly from its all-time high, trading below $1,600. While the article questions if this is a buying opportunity, it highlights macro headwinds like inflation, high interest rates, and geopolitical conflicts as key drivers of the crypto market's cooling enthusiasm. Investor rotation into AI stocks and IPOs also contributed to Ether's decline, suggesting a broader risk-off sentiment impacting speculative assets.
Ether (ETH 5.93%), the native token of the Ethereum blockchain, reached its all-time high of $4,946 on Aug. 22, 2025. But as of this writing, it trades below $1,600. Does that pullback represent a buying opportunity for long-term investors, or will it sink even lower this year?
Ether was originally a proof-of-work (PoW) cryptocurrency like Bitcoin (BTC 3.09%), which could be mined with powerful computer chips. But in 2022, Ethereum transitioned into a proof-of-stake (PoS) blockchain, which no longer supported mining. However, it added support for smart contracts, which allowed developers to create decentralized apps on its blockchain, and staking, which enabled investors to lock up their Ether to earn interest-like rewards.
After that transition, Ether was valued by the growth of its developer and staking ecosystem rather than its scarcity. As of last September, Ethereum hosted 31,869 active developers, making it the largest blockchain-based developer platform. Ethereum's Layer 1 (L1) blockchain is slower than newer PoS blockchains like Solana (SOL 4.79%), but it's keeping up with its Layer 2 (L2) rollups, which bundle its transactions and process them off-chain at higher speeds.
The market's enthusiasm for Ethereum's booming developer ecosystem propelled its price to record highs last year. Still, it fizzled out as inflation, elevated interest rates, high Treasury yields, geopolitical conflicts, and other macro headwinds chilled the crypto market. Many investors also took profits in Ether to invest in AI stocks and upcoming IPOs, such as SpaceX.
This Card Just Received a Rare 5-Star Rating
Our team of credit card pros don’t just recommend this card—they actually use it. Motley Fool Money calls it a top pick for a reason.
As Ether's price fell, some companies -- like Bitmine (BMNR 11.12%) -- bought more tokens for their Ethereum treasuries. However, those purchases couldn't prop up Ether's price, and they're now sitting on billions of dollars in unrealized losses. If those Ethereum treasury companies liquidate their holdings to raise more cash, they could drive Ether's price even lower. That sell-off could trigger even more leveraged liquidations.
I'm bullish on Ether's long-term prospects, but I don't think its sell-off is over. The wave of hot IPOs -- including SpaceX, OpenAI, and Anthropic -- could pull more cash out of the crypto market, and the persistent macro headwinds could keep new investors on the sidelines.
When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 968%* — a market-crushing outperformance compared to 211% for the S&P 500.
They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.
That said, it might be worth nibbling on if you don't plan to sell your tokens for at least a few more years. But if you can't stomach the near-term volatility, it's better to wait for those headwinds to dissipate and its price to stabilize before starting a new position.