Ethereum started 2025 with ups and downs. It fell to $2,150 on February 3 but quickly rose to $2,700 in just 24 hours. The price change happened because of increased market ups and downs caused by new U.S. taxes and diplomatic efforts that reduced global financial stress. Ethereum’s value has dropped 15% in the past week and is dominated by other blockchains.
Gas Limit Increase and Network Scaling
A key recent update for Ethereum was raising its gas cap for the first time since 2021. This change increased the cap from 30 million to over 31 million, to reach 36 million soon. This helps process more transactions quickly and reduces delays, but it doesn’t fix Ethereum’s ongoing issues with high costs and slow speeds.
Ethereum takes just over 1 million transactions daily, while Solana manages more than 60 million at a much lower cost. To address this, Ethereum’s Pectra upgrade, planned for early 2025, will improve layer-2 scaling options. Blobs, which hold transaction data outside the leading network, will have double the storage space, making the network work better.
Ethereum vs. Competitors: Can It Maintain Market Dominance?
Even though Ethereum has improved, it is under increasing competition from other platforms like Solana, Avalanche, and Sei, which provide better scaling without needing extra solutions. The overall trend in the market is shifting towards fast and cheap blockchains, which puts Ethereum in a tough spot. It needs to change quickly, or it might fall behind.
Trust in institutions and stability in the market
Even with recent ups and downs, Ethereum has strong support from big investors. On February 4, Fidelity bought $49.75 million in ETH, which boosted trust in the market. World Liberty Financial (WLFI), associated with Donald Trump’s family, transferred $307.41 million in cryptocurrency, showing ongoing interest from institutions in Ethereum.
Conclusion
Ethereum’s recovery relies on the overall economy, updates to its network, and how investors feel about it. The rise in the gas limit and the Ethereum’s Pectra upgrade help make it more efficient, but Ethereum needs to show that it is still more valuable than faster and cheaper options.
