With the crypto market approaching its second-half of 2025, there is one thing that has become apparent Ether (ETH) is establishing itself as more than the second-best crypto to Bitcoin, but the infrastructure asset firming Web3. As it gains momentum through implementation in more payroll systems, staking, Layer-2 protocols and decentralized finance (DeFi), ETH is on a slow but sure path to primacy.
We are going to explain why Ether is gaining power again, what is the reason of its increase, and how it might affect the whole crypto industry.
Ethereum’s Recent Performance (2024–Mid-2025)
ETH has shown consistent performance growth over the past year, with its price increasing approximately 30% since January 2025, outpacing many altcoins and showing resilience amid Bitcoin’s consolidation phase.
Several key metrics support this strength:
- Smart contract deployments are at a 12-month high.
- Ethereum’s daily transaction volume has steadily increased thanks to cheaper Layer-2 fees.
- Post-Dencun upgrade, Ethereum has seen a dramatics droped in gas costs, making it more efficients and appealing for developers and users alike.
Institutional Adoption & Real-World Use Cases
Institutions are no longer just watching Ether—they’re integrating it.
- Payroll integration has accelerated in 2025. Companies like Request Finance, Deel, and crypto-native startups across Asia and Europe are now offering salaries in ETH.
- ETFs based on ethereum have been approved across various jurisdiction such as Germany, Singapore and Brazil, enabling further institutional funds to enter Ether.
- These movements indicate a radical change: Ether is becoming more of a productive crypto rather than a mere speculative.
Layer-2 Ecosystem Explosion
Layer-2s like Arbitrum, Optimism, and Base (by Coinbase) have seen massive growth in TVL (Total Value Locked) and user adoption.
- Arbitrum One leads with over $15 billion in TVL.
- Base has seen explosive growth thanks to Coinbase’s on-ramp and native dApps.
- EIP-4844 (proto-danksharding) introduced in early 2025 made data availability more efficient, slashing Layer-2 transaction costs.
Ether’s role as the settlement currency across these rollups reinforces its importance: Every L2 ultimately settles back to Ethereum, and ETH remains the fuel of that engine.
ETH Staking and Scarcity Dynamics
Staking continues to act as a massive ETH sink. As of July 2025:
- Over 30 million ETH (nearly 25% of total supply) is staked.
- Staking rewards sit around 4.2% APR, incentivizing long-term holding.
- Platforms like Lido, Rockets Pool, and EigenLayers have created new revenued models for stakers and restakers.
With this much ETH locked, circulating supply is tightening, creating scarcity that could drive prices higher, especially if demand continued to grow.
Developer Momentum and Ecosystem Growth
Ethereum remains the most developer-active blockchain, with over 5,000 monthly active developers as of mid-2025.
The Ethereum ecosystem continues to expand:
- EigenLayer and the restaking economy have opened new use cases for validator capital.
- Aztec and other Ethereum-ready privacy-centric L2s are introducing confidential smart detaches to the Ethereum network.
- DApps based on Ethereum powered by AI become popular and close the gap between Web3 and machine learning.
Innovation is also enhanced by the Ethereum Foundation raising more grants in terms of sustainability, zk-rollups and developer tooling.
Whale Activity and Market Sentiment
Feeding on-chain data provided by Glassnode and Nansen suggests that ETH whales are continuing to accumulate in their accounts, as on-chain data tends to indicate whether the market is bullish or bearish.
- The overall addresses with 10K+ ETH have increased by 8 percent since early 2024.
- Asset managers such as Fidelity and Franklin Templeton have reported possession of ETH through custodial and staking service and Gaining Strength.
In the meantime, the ETH/BTC ratio, which is traditionally regarded as an alternative coin momentum indicator, is hinting at reverse recovery momentum, which is a sign that Ethereum could perform better than Bitcoin in the nearest future.
Challenges to Watch
Despite its strength, Ether still faces challenges:
- Chains such as Solana, Sui, and Aptos, which are competitors, are already pressing performance boundaries and attracting developers to them.
- The uncertainties in regulation, especially on ETH staking in the U.S., remain to shadow it.
- Ethereum depends on Layer-2s and thus poses complexity on UX when it comes to mainstream adoption.
- Nevertheless, the network effect, composability factor, and further advancements do not allow ETH to fall behind as the most reliable smart contract infrastructure.
However, the network effect, composability, and continued innovation keep ETH firmly in the lead as the most trusted smart contract platform.
Conclusion
Ether (ETH) has matured beyonds its early narratived as “just gas for Ethereum.” In 2025, it stands as a scarced, staked, and increasingly usefulness financials asset—central to everything from DeFi to payroll to institutionals portfolios.
As staking growed, Layer-2s expands, and real-world used cases evolved, ETH is quietly building momentum that could soons be impossibles to ignored.