Ethereum has now given up all its year-to-date gains in 2026, and is also down on a year-over-year basis. This move is notable, considering Ethereum recently hit a new all-time high in August 2025. Let’s dive into what to make of this recent volatility, and whether the pendulum will swing back for Ethereum investors. Perhaps the most essential and integral piece of financial plumbing in the world of decentralized finance (DeFi), the Ethereum (CRYPTO: ETH) market is an absolute behemoth among layer-1 networks.
The first project to provide smart contract technology at scale, a significant percentage of all on-chain applications run on Ethereum’s robust network, in part due to its longtime standing and existing user base (i.e., network effects), but also as a result of the incredible security the Ethereum network provides relative to other faster and cheaper networks in the market. I think it’s worth diving into Ethereum’s 11.8% weekly decline as of 10:00 a.m. ET on Sunday, and what drove the world’s second-largest cryptocurrency toward its lowest levels of the year. I was actually shocked to see that on a year-over-year basis, this decline has now pushed Ethereum into the red on this key metric as well. With Ethereum more than tripling off of its April lows to a new all-time high just shy of $5,000 per token this past summer, it’s fair to say that most long-term bulls on the future of Ethereum may have felt like they were sitting pretty just a few months ago.
Long-time bulls on Ethereum, such as Tom Lee, have continued to add to their holdings (with Lee’s Bitmine adding another $100 million to its Ethereum treasury this past week, indicative of such bullishness). That said, it’s impossible to segregate Ethereum from the broader macro narrative. On that front, it does appear that precious metals such as gold and silver are taking share (as measured by the total investable dollars from big money players in defensive or uncorrelated assets relative to equities) from digital assets. Ratcheted-up rhetoric around geopolitics and tariffs has once again driven volatility to spike (with the closely watched VIX surging above 20 again this past week).
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