The decline in Ethereum's revenue in 2025 has raised concerns among analysts and investors. In August, network revenue dropped by 44%, despite ETH's high price.
Reasons for the Sharp Decline in Ethereum's Revenue
In July, Ethereum earned $25.6 million, but in August, this figure fell sharply to $14.1 million. The primary reason for the decline is the Dencun upgrade, which took place in March 2024. This update lowered transaction costs for layer-2 networks, making them more affordable, but simultaneously reduced Ethereum's revenue from its base layer.
Investor Reaction to Revenue Decline
Despite the negative news, institutional investors have not abandoned Ethereum. During Labor Day week in the U.S., despite outflows from Ether ETFs totaling $787.6 million, Ethereum-based projects continue to receive funding. For instance, Etherealize raised $40 million in September to expand Ethereum's use in businesses. Analysts like Matt Hougan from Bitwise note that staking returns still make Ethereum attractive to investors.
Competition and Ethereum's Future
Experts believe Ethereum faces competition from cryptocurrencies like Bitcoin and Solana. Bitcoin is viewed as 'digital gold,' while Solana offers faster and cheaper transactions. However, Ethereum's strong DeFi projects and recognition by regulators help it maintain its market position. The revenue decline in 2025 adds weight to arguments that other blockchains might prove more efficient.
The decline in Ethereum's revenue in 2025 highlights the growing gap between financial fundamentals and ETH's price movement. Whether this drop is a short-term effect of lower fees or a more significant issue within the system remains uncertain, but the combination of high prices and declining revenue will stay a major focus for the market in the coming months.
