Ethereum Value Reconstruction: Ecological Changes Behind the Market Rebound

The price of Ethereum rebounded from a low of $1385 to $2700, with an increase of as much as 97.7%. Behind this rebound, institutional funds have maintained a cautious attitude in the ETF market, while the open interest of derivative contracts has reached a historic high of $32.2 billion. The market seems to hope to prove that Ethereum is still a value pit through this rebound, and the Pectra upgrade also supports this narrative. Through comprehensive data analysis, we attempt to outline the current true state of Ethereum, which is gradually emerging as one undergoing value reconstruction.

Market and Capital: Institutional Caution vs Contract Enthusiasm

As of May 18, the total net assets of the US ETH ETF reached $8.97 billion, accounting for 2.89% of Ethereum's total market capitalization. In comparison, Bitcoin ETFs account for 5.95% of its total market capitalization, indicating that the ETF market still prefers Bitcoin over Ethereum.

From February to the end of April, funds for Ethereum ETFs mostly showed a net outflow. They only began to flow back in starting April 21, but the amount was not significant. In April, the net inflow was about 66.25 million dollars, and so far in May, the net inflow is about 30 million dollars.

According to the data, at the end of April, Ethereum's "Net Unrealized Profit/Loss" ( NUPL ) turned positive, having been negative from April 1 to 22. At that time, the price of Ethereum fell below $1800, reaching a low of $1385, which meant that most holding addresses were in a state of loss. As of May 17, NUPL reached a maximum of 0.328, indicating that the market is in the early stages of a bull market or recovery period and has not yet entered an overly optimistic phase.

Interestingly, as the price rebounded, the number of addresses on the Ethereum chain with a balance greater than 1 decreased, whereas this data continued to rise during the previous price drop, indicating that many investors chose to buy the dip during the downtrend. After the price exceeded $1800, some addresses chose to take profits, but the decline was not significant, at only about one-thousandth. Currently, the percentage of profitable Ethereum addresses has reached 60%.

Despite the recent price rebound being far from historical highs, the contract open interest has reached a new high. On May 14, the Ethereum contract open interest reached $32.249 billion, nearly at its historical peak. The last time it reached this level was in January-February 2025, when the price of Ethereum fluctuated between $3000 and $3800. This indicates that market speculation enthusiasm for Ethereum remains strong.

Overall, Ethereum began to attract capital inflows after hitting a low at the end of April, with prices subsequently rising sharply, reaching a maximum increase of 97.7%. However, in terms of capital inflow, especially the flow of ETF funds, the proportion of traditional institutional capital has still seen limited growth.

TVL Rebounds, but Low Gas Fails to Stimulate Trading Volume

In terms of on-chain activity, the number of active addresses on Ethereum has not changed much, remaining fluctuating between 400,000 and 600,000 daily, a pattern that has persisted for over a year. However, there is a recent trend of the fluctuation curve breaking above the 600,000 range.

The changes in TVL data are more evident. The TVL in USD has rebounded since April 22, rising from around 45 billion to a peak of 64.6 billion. However, considering the significant increase in Ethereum prices during the same period, this change may not reflect the true situation on-chain. When calculated in ETH, the amount of ETH staked on the Ethereum chain has significantly decreased since April 9, dropping from a peak of 30.26 million to a low of 24 million, a decline of 20%.

This phenomenon may stem from the rapid rise in Ethereum prices, where some funds choose to take profits or avoid opportunity losses, resulting in a decrease in the quantity of tokens.

Regarding gas fees, as of May 16, the average gas price on Ethereum was 3.572 Gwei, a significant decrease of 21.57% compared to the previous day and a sharp drop of 51.76% year-on-year. Over the past 30 days, gas fees have shown an overall downward trend, briefly soaring to 10.61 Gwei on May 8, but have recently remained below 8 Gwei, dropping as low as 1.6 Gwei on May 3. This change is related to EIP-7691 in the Pectra upgrade, which aims to reduce L2 costs by expanding blob space.

However, the extremely low Gas fees seem to have not stimulated the growth of on-chain transactions. The daily transaction volume data shows no significant change.

DEX Trading and Asset Landscape: Dominance of Stablecoins and Ecological Transformation

On-chain staking data shows that from April 15 to May 5, the staking volume of Ethereum continued to experience a net outflow. In particular, a well-known exchange has seen a 30% outflow in staking over the past six months. Currently, the validator with the highest staking volume is still a well-known staking service provider, with a staking volume of 9.11 million.

In terms of DEX trading volume, the Ethereum mainnet will clearly enter an active period after 2025, with activity levels higher than in 2024, approaching the peak period of 2021 to 2022. However, from the revenue data perspective, the recent increase in trading activity mainly comes from stablecoin-related transactions. A well-known stablecoin has generated $568 million in fees on Ethereum in the past 30 days. As of May 18, Ethereum still has the largest issuance of stablecoins among public chains, accounting for over 50%, with a total issuance of $127.3 billion, which is twice the TVL of Ethereum DeFi.

Analyzing the categories of funds on the Ethereum chain reveals that nearly half of the transactions are completed through transfers of stablecoins and ETH. Moreover, the proportion of stablecoin transactions has significantly increased, while the share of DeFi and ERC-20 token transactions has actually been declining. This indicates that Ethereum is transitioning towards a role as a value storage center for on-chain assets, while the development of MEME and application types seems to be constrained. Therefore, Ethereum's strategy to boost activity by reducing transaction fees and increasing transaction speed may be difficult to achieve.

In addition, although the average on-chain transaction amount on Ethereum has declined, it still remains between several thousand dollars and 10,000 dollars, far higher than other public chains. This highlights Ethereum's position as a chain exclusive to large holders.

Overall, the recent significant price Rebound of Ethereum seems more like a result of the pains during its transformation period. On one hand, the Ethereum ecosystem is striving to optimize its performance through continuous technical updates and upgrades, but the results seem to be not very obvious. On the other hand, it has become a hub for large fund and stablecoin transactions, and large holders seem to be satisfied with the relatively quiet on-chain state of Ethereum at the moment.

Therefore, the rise and fall of a single indicator can no longer simply define the merits of Ethereum. The market may need to move beyond traditional growth narratives and re-examine and understand Ethereum's core role and long-term value in a multi-chain landscape. Rather than being fixated on judging whether it is "rising" or "declining", it is better to recognize that after going through various uproars and iterations, a more mature and "stable" Ethereum may be the inevitable direction and final form of its evolution.