Ethereum Faces Historic Decline as Market Share Hits Multi-Year Low

Ethereum’s market position deteriorated dramatically in Q1 2025, with its price plummeting from $3,336 to $1,805, erasing all gains from 2024. CoinGecko reports that Ethereum fell by 3.9 percentage points in Q1, with its dominance at 7.9%, the lowest level since late 2019.

The broader cryptocurrency market experienced an 18.6% contraction in Q1, with total market capitalization falling to $2.8 trillion from a January peak of $3.8 trillion. Trading volumes declined 27.3% quarter-over-quarter to $146 billion daily, reflecting diminished investor participation across the sector.

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Bitcoin Dominance Reaches 2021 Levels

While altcoins suffered severe losses, Bitcoin strengthened its market position, achieving 59.1% dominance by quarter-end. This level hasn’t been seen since early 2021, demonstrating Bitcoin’s resilience during market downturns as investors seek relative safety.

Stablecoins benefited from market uncertainty, with Tether slightly increasing its market share to 5.2%. USDC reclaimed its position as the seventh-largest cryptocurrency, displacing Dogecoin amid flight-to-stability trends.

Solana Challenges Ethereum’s DEX Supremacy

CoinGecko’s Q1 report reveals that Solana dominated decentralized exchange trading in Q1 2025, capturing 39.6% market share. The network processed $293.7 billion in DEX volume, growing 35.3% from Q4 2024 and capturing 52% of January’s on-chain trades.

Ethereum’s DEX market share dropped below 20% for the first time in January before recovering to 30.1% by March. The competition intensified as newer chains like Sonic and Berachain entered the top 10, displacing established players Optimism and Polygon.

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DeFi Total Value Locked Plunges

The decentralized finance sector experienced significant contraction, with multichain Total Value Locked declining 27.5% from $177.4 billion to $128.6 billion during Q1. This $48.9 billion reduction reflects broader market sentiment and reduced risk appetite among DeFi participants.

Ethereum’s struggles extend beyond price performance to fundamental metrics, raising questions about its competitive position against newer, more scalable alternatives offering lower transaction costs and faster processing times.

Market Structure Shifts Signal New Era

The dramatic shift in market dynamics suggests a potential restructuring of cryptocurrency hierarchy. Bitcoin’s increasing dominance coupled with Ethereum’s declining market share indicates investors are reassessing risk profiles across different blockchain ecosystems.

Industry observers note that Ethereum’s reduced dominance may accelerate development efforts around scalability solutions and cost reduction initiatives to maintain competitiveness against emerging blockchain platforms.