Ethereum in 2025: Upgrades, Losses, and What's Next
Fusaka shipped. Glamsterdam is coming. 40% of holders are underwater. BlackRock bought 2.4M ETH. The complete Ethereum 2025 recap.
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Ethereum in 2025 was a story of contradictions.
Technical wins: Fusaka shipped successfully. Layer 2 fees dropped. The roadmap accelerated.
Market pain: 40% of ETH holders are underwater. ETF outflows hit $560 million in December. Price stuck around $3,000.
Institutional interest: BlackRock increased holdings by 224%. Companies are staking hundreds of millions.
Let's break it all down.
The upgrades that shipped
Pectra (Early 2025)
The year started with Pectra, which activated 11 Ethereum Improvement Proposals:
- Layer 2 fees cut by 40%
- Increased throughput per block
- Better Layer 1 scaling
This was the prep work for bigger changes.
Fusaka (December 2025)
The main event. Fusaka focused on:
- Preserving Ethereum's core features
- Major scaling improvements
- Data efficiency upgrades
- Reduced costs for node operators
Deployed successfully in early December. No major issues. This is how upgrades should work.
What's coming in 2026
Glamsterdam
Two simultaneous upgrades on Ethereum's core layers. Key focus: MEV fairness.
The MEV problem is real. Validators and searchers extract value from users through transaction ordering. Glamsterdam aims to fix this—or at least reduce it.
Expected: First half of 2026.
Hegota
Just announced. The second major upgrade for 2026. Details still emerging, but developers are moving fast.
The goal: 10,000 transactions per second on Layer 1, with Layer 2s handling hundreds of thousands.
The market pain
Here's the uncomfortable part.
40%+ of ETH supply is held at a loss.
As December closes, over 40% of Ethereum holders are underwater. They bought higher than current prices. They're waiting for recovery.
ETH ETF outflows:
- November: -$1.42 billion net outflows
- December: -$560 million (and counting)
That's two consecutive months of money leaving ETH ETFs. Not a great sign for short-term sentiment.
Price action:
ETH has traded sideways around $3,000 for weeks. The "flippening" narrative (ETH overtaking BTC) is dead. Ethereum maximalists are quiet.
Exchange reserves increasing:
400,000 ETH moved onto exchanges in December. When ETH moves to exchanges, it usually means people plan to sell.
The institutional story
Not all news is bad.
BlackRock's 224% increase
The world's largest asset manager added 2.4 million ETH ($6.71 billion) in 2025. That's a 224% increase in holdings.
Most came through their spot ETF. Despite the price drop, they kept buying.
Bitmine's massive stake
Bitmine, an Ethereum treasury company:
- Staked 74,880 ETH ($219 million)
- Total holdings: over 4 million ETH
- Goal: own 5% of total ETH supply
They're betting big on Ethereum's future. Very big.
JPMorgan's tokenized fund
In December, JPMorgan announced a tokenized money-market fund on Ethereum. $100 million seed from their own capital.
The same JPMorgan that called crypto a scam. Now building on Ethereum.
Why the disconnect?
Technical progress + institutional buying + price stagnation = confused market.
Possible explanations:
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Macro pressure. Broader market conditions affecting all risk assets.
-
Competition. Solana, Base, and other chains eating market share.
-
Narrative fatigue. "Ethereum is the future" is old news. Markets want new stories.
-
Unlock pressure. Staked ETH and institutional positions creating overhead supply.
-
ETF structure. ETH ETFs aren't as popular as BTC ETFs. Staking yield isn't included.
Layer 2 reality check
Ethereum's scaling strategy depends on Layer 2s. How's that going?
The good:
- Fees are down significantly
- Transaction throughput is up
- Major apps live on L2s (Base, Arbitrum, Optimism)
The concerning:
- Value often stays on L2, not settling to mainnet
- ETH as "money" thesis weakened when activity moves elsewhere
- L2 tokens competing with ETH for attention
Ethereum becomes infrastructure. Invisible plumbing. Good for usage, maybe not for price.
The competition
Solana had a good year:
- Spot ETF approved
- Staking ETF launched with 5% yield
- Developer activity increasing
- Cheaper and faster for most users
Base (Coinbase's L2):
- Explosive growth in 2025
- Eating into Ethereum mainnet activity
- Essentially an Ethereum L2, but captures value differently
The multi-chain future is here. Ethereum is a player, not the only player.
What to watch in 2026
Glamsterdam success
If MEV fairness improvements work, it's bullish for user experience. If they fail or cause issues, it's more ammunition for critics.
ETF dynamics
Will outflows reverse? If institutions keep buying through other channels while ETFs bleed, the story is complicated.
L2 value capture
Does ETH capture value from L2 activity? Or do L2 tokens and operators keep most of it?
Developer retention
Are developers still choosing Ethereum? Watch GitHub activity, new project launches, grant allocations.
Price targets
Some analysts target $7,000-$9,000 by early 2026. Others see more sideways action. The range is wide because conviction is low.
For ETH holders
If you're underwater:
- The technology is still shipping
- Institutional interest is real
- But narratives move faster than fundamentals
- Don't assume recovery is guaranteed
If you're considering buying:
- Network effects still matter
- But competition is real
- L2 strategy is working technically, unclear economically
- Position sizing matters more than timing
If you're building:
- Ethereum still has the largest developer ecosystem
- L2s offer better economics for most apps
- But watch where users actually go
- Multi-chain deployment is increasingly standard
The honest assessment
Ethereum in 2025:
Wins:
- Successful upgrades (Pectra, Fusaka)
- Institutional buying (BlackRock, Bitmine, JPMorgan)
- L2 scaling working
- Security remained solid
Losses:
- Price stagnation
- ETF outflows
- Narrative momentum
- Market share to competitors
Unclear:
- Whether technical progress translates to price
- Whether L2 strategy captures value for ETH
- Whether institutional buying continues
- Whether 2026 upgrades deliver promised improvements
Ethereum is still the most important smart contract platform. But "most important" and "best investment" aren't the same thing.
Act on what you know. Acknowledge what you don't.
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