How big is the psychological gap for Ethereum holders this year? Technical upgrades frequently top trending searches—L2 transaction fees plummeting, ecosystem iteration accelerating—the result is still a sea of green in accounts. From $4900 down to now, some are shouting "Ethereum is being shorted," while others are eager to buy the dip. But the true story behind this market movement might be misunderstood by most.

This is not simply a collapse. To be precise, Ethereum is actively transforming—from a "speculative asset" to a "global financial infrastructure." It is currently stuck in the most painful transition period.

The old story goes like this: ETH was once popular because of the "Ultrasound Money" concept. The more it is used, the scarcer it becomes, and EIP-1559 directly burns transaction fees, which sounds perfect. But after the 2024 Dencun upgrade and the 2025 Fusaka upgrade, everything changed. The technology became a problem—L2 transaction fees dropped by 90%, users migrated en masse to Layer 2, the mainnet blocks no longer congest, and the burning rate plummeted.

Does it look like self-destruction? Actually, it’s intentional. The Ethereum team has long figured this out: relying on scarcity to become a celebrity is only a flash in the pan. To build a century-long foundation, it must become infrastructure. L2 is not competing with L1 for resources; the Base chain’s annual revenue of $75 million is fundamentally about expanding Ethereum’s domain—digesting retail transactions, enabling high-frequency small-value operations on L2, while L1 focuses on large-value settlements and RWA (real-world asset on-chain) scenarios that require strong trust. This is not decline, but division of labor.