EF 20% layoffs and continuous ETF outflows: Is ETH price $1,557 the bottom or a falling continuation?

On June 23, 2026, the Ethereum Foundation (EF) announced the largest organizational restructuring in its history: laying off 54 people (about 20% of total employees), cutting the 2026 budget by 40%, and reorganizing its internal structure into five major core work clusters. The news sparked widespread discussion in the crypto industry—supporters saw it as a “strategic contraction that should have happened earlier,” while skeptics were concerned about talent loss and weakened governance capabilities.

At the same time, Ethereum spot ETFs are experiencing their longest continuous stretch of net outflows since launch. As of June 25, Ethereum spot ETFs had recorded fund outflows for six consecutive trading days; on June 25 alone, the net outflow was $81.86 million. ETH prices also came under pressure. According to Gate’s market data, as of June 26 ETH was reported at $1,557.53, down more than 15% from the June 16 high of $1,843. Over the past 30 days, the decline was 20.92%, and compared with a year ago, it was down 31.14%.

These two developments occurred within the same month, and it is by no means a coincidence. What is the strategic intent behind the EF restructuring? What responsibilities do the five clusters each take on? Is there a structural connection between the continued ETF outflows and the price decline? Is ETH at $1,557 a bottom signal or a continuation of the drop? This article analyzes the situation from two dimensions: organizational change and capital flows.

EF Restructuring at a Glance: 54 Layoffs, 40% Budget Cut, Five Core Clusters Introduced

Restructuring Background: Transition from an “Expenditure-Based” model to a “Donation-Based” one

The core driving force behind this EF restructuring is a fundamental shift in its financial model. Ethereum co-founder Vitalik Buterin disclosed in the announcement that the EF is moving from a model in which it spends about 15% of the remaining treasury each year, to a long-term donation-based organization that spends about 5% annually after 2030.

The logic chain is clear: the EF’s treasury reserves are not infinite resources, and since the ETH price peak in August 2025, ETH-denominated purchasing power has contracted by roughly 60%. Against this backdrop, maintaining the original spending pace would accelerate treasury depletion. A 40% budget cut (for 2026) and a 20% workforce reduction essentially extend the EF’s “survival horizon” from several years to several decades—an intentional contraction for long-term survival.

54 Departures: Severance Arrangements and Ecosystem Integration

The 54 employees who were laid off will receive severance pay equal to the higher of “one month’s salary per year of service” or “local statutory standards,” plus transition support and assistance with placement in ecosystem roles. The EF expects that most departing employees will continue to contribute to the Ethereum ecosystem in other ways over the coming weeks.

It is also worth noting that this round of layoffs occurred after a series of executive departures. Since January, about 9 senior managers have left, including two co-executive directors. The continuing loss of leadership means that this restructuring is not merely “downsizing,” but a deeper reshaping of the governance architecture.

The Five Clusters: Division of Labor and Positioning

After the restructuring, the EF is divided into five domain-oriented clusters, plus an operations cluster and a management support team. Each cluster has its own internal structure and accountability framework.

The Protocol Layer takes on the EF’s traditional core responsibilities: ensuring that the Ethereum protocol continues to deliver on its promise of “self-sovereign scalability.” Key work focuses include post-quantum security, zkEVM, L1 privacy, and other technical breakthroughs, as well as preventing harmful MEV and defending against censorship and capture risks. This cluster explicitly states that it is “not trying to make Ethereum more marketable” or “easier to control by intermediaries.”

The Access Layer focuses on a “zero-intermediary” path for users interacting with the chain. The core principle is “zero options”—for every route that involves intermediaries, there must be a credible intermediary-free alternative. It covers key actions such as reading on-chain data, transactions, proofs, delegation, and exits.

The User Layer is responsible for building protocol and Access Layer decisions on real user needs and usage data. Its core function is to feed actual user feedback into protocol development decisions.

The Community Layer manages the EF’s public positioning and external relationships, aiming to distinguish the EF from “zero-sum financial crypto” and “enterprise-compromised crypto.” It actively partners with open-source communities in areas such as privacy crypto, civil liberties, and decentralized networks.

The Institutional Layer handles outreach between the EF and financial institutions, enterprises, governments, universities, and non-profit organizations. Its core goal is, while promoting Ethereum adoption by institutions, to maximize the preservation of core values such as fair execution, privacy protection, and the right to exit—so as to prevent Ethereum from becoming merely a compliant back-end.

What Was Cut

The budget reductions directly affect some specific projects: the Privacy and Scaling Explorations team will be gradually dissolved as an independent unit; Devcon will shrink in scale and improve cost efficiency; funding for large external projects will be reduced; redundancy across multiple client teams will no longer be maintained, shifting instead to AI-assisted formal verification.

ETF Continuous Outflows: What Are Institutional Funds Leaving?

Six Consecutive Down Days: Full Data Panorama

As of June 25, Ethereum spot ETFs have recorded net outflows for six consecutive trading days. On June 25, the single-day net outflow was $81.86 million, with BlackRock’s ETHA leading the outflows at $62.99 million. Net outflows on June 24 were $30.24 million. Net outflows on June 23 were $82.40 million.

If you extend the timeline, since mid-May Ethereum spot ETFs have recorded net outflows for six straight weeks. This trend contrasts with the Bitcoin ETF—although it also sees outflows, it shows a “rotation” pattern of “IBIT outflows, other funds inflows,” rather than a consistent exit.

Outflow Logic: Not Just About Price

Sustained ETF outflows cannot be simply attributed to “redemptions caused by falling prices”—the causal relationship may run the other way. The continued withdrawal of institutional capital itself becomes a source of downward pressure on prices. The deeper issue is that institutional investors are reassessing their investment logic for Ethereum.

Demand for Ethereum ETFs has historically been more volatile than that for Bitcoin ETFs. The core reason is that Ethereum’s investment narrative is more complex: staking yields, network revenue, Layer 2 activity, tokenization progress, regulatory treatment, and other variables intertwine, leaving the institutional valuation framework for ETH far less clear than for Bitcoin. When market risk appetite declines, assets with “high narrative complexity” are often the first to be hit.

Structural Pressure on ETH Price: Has It Bottomed?

Current Price

As of June 26, 2026, ETH is reported at $1,557.53. The 24-hour change is down 5.49%, the 7-day change is down 7.38%, the 30-day change is down 20.92%, and it is down 31.14% compared with a year ago. The 24-hour trading range is $1,512.11 to $1,660.42. Market cap is approximately $187.968 billion, with market sentiment neutral.

By comparison, Solana was at $67.21 on June 26, up 2.97% on the day, bucking the trend. The competitive landscape between the two chains is shifting from “ETH leading, SOL catching up” to a more locked-in state. In Q1 2026, Solana captured over 30% of spot DEX trading volume, processing about 1.67 million daily active addresses, while Ethereum mainnet’s daily active addresses in the same period were about 496,000.

Three Layers of Structural Pressure

First Layer: Liquidity and capital flows. Six consecutive weeks of net ETF outflows indicate institutions are reducing allocations. As long as this trend does not show a clear reversal, ETH will face sustained sell pressure.

Second Layer: Fundamental expectations. Although the EF restructuring has been interpreted in part as a “bullish signal” (Solana co-founder Anatoly Yakovenko commented on X, “bullish, fr”), near-term uncertainty cannot be ignored. Layoffs and executive departures imply a temporary weakening of execution capability, and the new five core clusters need time to bed in.

Third Layer: Macro and competitive dynamics. The crypto market overall is in a downtrend, with Bitcoin approaching the $60,000 threshold. Meanwhile, competing chains such as Solana continue to exert pressure on Ethereum’s market share due to advantages in speed and cost.

Bottom Signal vs. Continuation of the Downtrend

From a valuation perspective, ETH’s current price is down about 60% from the August 2025 peak, putting it near the adjustment-range territory seen in several prior bear markets. The EF’s “soft pruning and completion” strategy—prioritizing security fixes and stability rather than expanding functionality—if executed properly, could help improve Ethereum’s reliability as a settlement layer in the long term.

However, there is no clear short-term catalyst yet. The ETF outflow trend has not reversed, the real impact of the EF restructuring will take several quarters to verify, and the macro liquidity environment remains uncertain. Whether $1,557 constitutes a firm bottom depends on substantive relief of at least one of the three layers of pressure described above.

Conclusion

This EF restructuring is, in essence, an identity shift from an “expansion-oriented R&D organization” to a “long-term donation-based protocol guardian.” The layoffs of 54 people, the 40% budget reduction, and the reorganization into five core clusters all point to the same direction: the EF is choosing to safeguard Ethereum’s core values with a smaller scale, narrower focus, and a longer time horizon.

Meanwhile, ETH is undergoing dual tests in both price and capital flows. The fact that Ethereum spot ETFs have seen net outflows for six consecutive weeks, alongside ETH’s 60% decline from the peak, indicates that the market is reevaluating Ethereum’s short-term narrative.

The long-term significance of the restructuring stands in sharp contrast to the short-term pressure on price. Whether the EF’s “slimming down” can lay a more solid foundation for Ethereum’s next decade depends on whether the five core clusters can operate efficiently and whether the CROPS attributes (censorship resistance, open-source, privacy, security) can continue to be delivered in real-world practice. For investors, whether ETH at $1,557 is an opportunity or a trap may not be answered by on-chain data alone, but rather by the next inflection point in macro liquidity and institutional confidence.

FAQ

Q: Why did the Ethereum Foundation lay off 20% of its staff?

The core driver behind the EF layoffs is a financial model shift. The foundation is moving from spending about 15% of treasury funds each year to a long-term donation-based model spending about 5% annually after 2030. Against the backdrop of ETH’s ongoing price decline, cutting the 40% budget and 20% workforce is intended to extend the foundation’s “survival horizon,” ensuring it can fulfill its protocol stewardship responsibilities over the long term.

Q: What are the EF’s five core clusters?

The five core clusters are: Protocol Layer (responsible for core protocol R&D and anti-censorship assurance), Access Layer (ensuring users can interact with the chain without trusted intermediaries), User Layer (building protocol decisions on real user needs), Community Layer (managing the EF’s public positioning and external collaborations), and Institutional Layer (driving institutional adoption while preserving Ethereum’s core values).

Q: Why is the Ethereum ETF experiencing continuous outflows?

As of June 25, Ethereum spot ETFs have recorded net outflows for six consecutive trading days. The main reasons include: institutional reassessment of Ethereum’s investment logic (complex variables such as staking yields, L2 competition, and regulatory uncertainty), a decline in overall market risk appetite, and redemption pressure triggered by the fall in ETH prices.

Q: Is ETH at $1,557 the bottom?

There is currently no clear near-term bottom signal. The ETF outflow trend has not reversed, the actual effects of the EF restructuring need time to be validated, and macro conditions still carry uncertainty. However, ETH is down about 60% from its peak, and valuations are in a historically low range. Whether a bottom forms depends on substantive improvement in at least one of these three areas: institutional fund flows, the EF restructuring’s execution, and macro liquidity.