Is Ethereum Losing its Edge? Here is What’s Behind the Altcoin’s Struggles

Ethereum (ETH) has experienced a notable drop in demand recently, leading to a decrease in its burn rate and an increase in circulating supply, which has negatively impacted its price.

A report from 10X Research identifies several factors contributing to this trend. One significant issue is the declining staking yields on the Ethereum (ETH) network. Since August, the Annual Percentage Rate (APR) for staking with Lido, the largest staking provider for Ethereum, has fallen to 2.90%.

This decrease in returns has caused many ETH holders to view staking primarily as a limited income source, rather than a way to engage more deeply with the Ethereum ecosystem.

Additionally, the rise of low-cost meme tokens on platforms like Solana (SOL) has shifted focus away from Ethereum, while higher yields available in traditional finance have made staking on Ethereum less attractive.

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As 10X Research points out, with traditional finance options, such as 2-year Treasury yields at 4.1%, significantly outperforming ETH staking yields, many holders are experiencing a gradual loss in value. This diminished demand for ETH has further eroded its worth compared to USD, Bitcoin (BTC), and other assets.

Despite a brief spike in activity after the September FOMC meeting, momentum for Ethereum has declined. Looking ahead, if Donald Trump wins the upcoming election, the competitive landscape for staking yields could remain challenging, exerting further downward pressure on ETH prices.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.