Ethereum (CRYPTO: ETH) investors might never see the 2025 bull market gains that saw the world's leading blockchain actually beat Bitcoin (CRYPTO: BTC) for once. Those days look to be over.  It's having an identity crisis. Is it merely a Web3 infrastructure giant? Or is it dead money for investors? 

As we approach the middle of 2026, Ethereum is down over 22%. Investors have taken a lot of money off the table following last fall's bull run. At the moment, Ethereum looks extremely "boring."

Some crypto traders are predicting Ethereum falls another $1,000.  As of this writing, ETH was valued at $2,300.

Research from Glassnode wrote in their Strategy Watch report dated April 23 that institutional flows into ETH have been weak all year. Recent commentary from the crypto crowd stresses that ETH's price today is only driven by investor mood for Bitcoin. Bigger investor trends are still buying the AI bubble on Wall Street, rather than chasing value in the cryptocurrency markets. 

"We can say the same about Bitcoin these days," said Ivo Georgiev, CEO & Founder of Ambire, a self-custodial Web3 wallet. "Ethereum's value is in actual real-world adoption. It’s the only chain where there’s actual DeFi with actual usage." 

Stablecoins and DeFi Keep Ethereum Relevant

Bitcoin and Ethereum both saw net outflows all of March, with capital flows closing the month at -$7 billion for Bitcoin and -$1.6 billion for Ethereum, based on Glassnode data. They said that the overall picture for Ethereum was "one of gradual stabilization rather than recovery," with big investor de-risking losing momentum.

For retail crypto investors, Ethereum has always been the place to go after you have already bought Bitcoin. The price mostly tracks Bitcoin, not how many new developers have launched a new DeFi protocol on it. 

Ethereum's latest investor friendly data point is that it hosts over $162 billion in stablecoins – more than half the global total, according to DefiLlama. U.S. stablecoin friendly legislation is driving some of that interest and demand, though how much is unclear. 

Moreover, real-world assets valued at around $15 billion also run on Ethereum. Jan Van Eck, CEO of VanEck Global, called Ethereum "Wall Street's token" last year during a Fox Business segment on The Claman Countdown.

"If you think that because of stablecoins every bank has to have a way to take in stablecoins…the blockchain they build that on is Ethereum," Van Eck said, adding that Ethereum is often hated when it hits its lows.

The Van Eck Ethereum ETF (BATS:ETHV) is up 13% over the last three months, benefiting from a general rise in crypto since April, but is still underperforming Bitcoin. 

Ethereum as the Bitcoin alt has been a lousy trade. Over five years, ETH is down 35%. Bitcoin is up 72% over the same period.

No one is giving up on Ethereum, overall, of course. Anyone who is invested in the Web3 theme is going to be positioned in Ethereum. That goes without saying. 

Georgiev said Ethereum suffers from a “jack of all trades” syndrome: it’s good at so many things that there’s no strong narrative of what it’s supposed to do. "Ethereum was conceived as a world computer, and I think that it’s succeeding at that," he said. "Unfortunately, the market needs a simple singular narrative to generate excitement, and ‘world computer' isn't it. But the numbers are there. It's the only blockchain with real DeFi activity, has consistently high swap volumes and not only during bull markets, and has a higher transaction capacity than its rivals."

At the recent Consensus 2026 conference in May, Kevin O’Leary framed ETH as an institutional-grade core holding, not a high-beta moonshot. He recommends investors think of  Ethereum as an infrastructure investment, or simple index exposure rather than as a speculative growth asset.

According to O'Leary, "All you need to own is Bitcoin and Ethereum."

Disclosure: The writer owns Bitcoin and Ethereum. Image created by the author using Canva.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.