Ethereum’s Strong Performance and Future Prospects
Over the past 12 months, Ethereum has outperformed Bitcoin in terms of price growth. While Bitcoin has experienced a decline of around 11%, Ethereum has seen a significant increase of 48%. This performance gap has been largely overlooked, as Ethereum’s price has been trending downward since the flash crash on October 10, 2025. However, there are strong indicators that this trend is likely to continue in the coming year.
Upgrades That Are Not Yet Fully Recognized
Unlike Bitcoin, Ethereum’s blockchain frequently undergoes significant incremental upgrades. As of last year, the pace of these upgrades has been set at two per year. In 2025, the Pectra update was launched in May, which expanded the data throughput capacity for Ethereum’s layer 2 (L2) networks. It also introduced account abstraction, a critical feature that enables regular wallets to temporarily function like programmable smart-contract wallets.
The Fusaka update, launched in December, introduced a data-availability sampling system called PeerDAS. These updates, along with prior improvements to the network’s scaling capabilities, have led to gas fees that are currently 83% lower than just 12 months ago and down 98% from three years ago.
This means that the Ethereum chain is significantly more capable than it was a year ago, and the development is ongoing. This year will see the launch of Glamsterdam, targeted for the first half of the year, and Hegota, scheduled for the second half. Both upgrade packages will build on the recent scaling improvements while laying the technical groundwork for even greater scaling improvements in the future, such as parallel processing of transactions.
Increasing Capital Allocation to Ethereum
Ethereum’s increasingly sophisticated blockchain won’t gain much attention if there isn’t real capital allocated to its ecosystem. Fortunately, the picture looks favorable and improving. Twelve months ago, Ethereum’s decentralized finance (DeFi) protocols had $45 billion in total value locked (TVL), the largest in the crypto sector by far. On April 14 of this year, TVL reached $56 billion.
More TVL means that there’s more capital parked on Ethereum to generate a yield, which in turn means there’s more capital available to fund the development of new decentralized applications (dApps) and other types of on-chain businesses producing value. As the chain’s throughput continues to improve, driving down gas prices and increasing the set of technical capabilities it can offer to developers looking to make apps, it’ll continue to become an even cheaper and easier place to launch new projects and manage on-chain capital.
The Gap Between Fundamentals and Price
Despite Ethereum’s fundamentals being meaningfully stronger than they were 12 months ago, its price hasn’t caught up. This kind of gap won’t last forever, and when it starts to close, the coin is likely to outperform Bitcoin by an even larger margin than it is now.
Should You Buy Stock in Ethereum Right Now?
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