In the hot topics of the 2025 crypto market, Ethereum's performance indeed warrants in-depth analysis. Since plunging from its all-time high of $4900 to now, even with support from spot ETFs and BlackRock's $2 billion fund, annual returns still disappoint many holders. This is not merely a routine market correction but a fundamental shift in Ethereum's underlying logic.

As an observer immersed in the crypto space for years, I want to discuss a core issue from the perspectives of technical upgrades and token economics: what factors are undermining Ethereum's value support? Can it make a desperate comeback, or is it heading into a long-term decline?

**The Cost of Upgrades: The Myth of Deflation Shattered**

In the past, the most convincing argument for ETH holders was the token's deflationary mechanism. The "more you use, the less there is" scarcity model once captivated many. However, the Dencun upgrade in 2024 and the Fusaka upgrade in 2025 changed all that. Technological innovations piled up, but the foundation of token economics has collapsed.

What is the most direct change after the upgrades? L2 transaction fees plummeted by 90%. On the surface, Ethereum became more "user-friendly," with transaction costs significantly reduced. But then problems emerged: the utilization rate of block space on the mainnet dropped sharply, and ETH burning via the EIP-1559 mechanism shrank dramatically. The grand narrative of that "ultrasound money"—achieving deflation and appreciation through token burns—has now been shattered.

From another perspective, it’s like Ethereum, to support its L2 ecosystem and these "progeny," has manually sawed off its own deflationary advantage. ETH has slipped from being a "scarce" gold bar that gets "less with use" to a common steel that is issued annually. This shift signifies a fundamental change in investment logic—from a hard asset with "value preservation" properties to a story of "growth" dependent on ecosystem applications. The psychological impact on holders is enormous.