Despite experiencing a decline since early 2025, Ethereum is showing signs of recovery. A report by Wall Street bank Citi highlights significant growth in total value locked (TVL) on Ethereum and positive institutional investment trends.
TVL Growth and Institutional Inflows
Despite fluctuations in user activity, Ethereum's key metrics are improving. The TVL on the network has significantly increased, indicating renewed investor confidence. Additionally, inflows into Ether-focused investment funds have risen, particularly following the U.S. elections. The launch of Ethereum ETFs in July has attracted $3.2 billion in investments. Analyst Alex Saunders believes that the Ethereum network is in the midst of a recovery, with TVL growth contributing to long-term investor confidence.
Rising Competition and Market Dynamics
While Ethereum's growth is promising, competition from Layer-2 networks and alternative blockchains is intensifying. Solana and other competing blockchains are expanding their user base, challenging Ethereum's dominance. This could lead to further portfolio diversification among investors. Citi's report also notes that Bitcoin's dominance has surpassed 60%, reaching its highest level in years, posing a challenge to Ethereum and other altcoins.
Regulatory Clarity and Institutional Confidence
Increasing regulatory clarity in the U.S. could create a more favorable environment for Ethereum and other cryptocurrencies. Citi's report mentions that World Liberty Financial, an investment firm linked to Donald Trump, reportedly holds $200 million worth of Ether. The presence of high-profile investors in Ethereum could further reinforce confidence in the asset.
In summary, while Ethereum's TVL growth and increasing fund inflows present a positive outlook, investors should also consider the impact of growing competition and Bitcoin's rising dominance when making investment decisions.
