Is Ethereum Undervalued? Insights from Two On-Chain Signals

Ethereum has faced significant challenges in 2025, making it one of the least successful major assets this year. However, it's important not to overlook the active movement of substantial sums in stablecoins across the platform, affirming its role as a vital settlement layer for global dollar liquidity. Additionally, large investors continue accumulating ETH, despite its currently low price. Are we missing a more significant narrative about Ethereum's potential?

Key Takeaways

Ethereum has underperformed in 2025, with a considerable price drop of about 12% year-to-date.
Despite its lagging price, Ethereum stabilizes tens of billions of dollars in stablecoin transactions daily.
Large holders are accumulating ETH rather than selling, indicating confidence in the asset’s future value.
On-chain signals suggest that Ethereum may be undervalued, contrasting with its price performance.

Ethereum [ETH]

Evaluating Ethereum's Performance in 2025

Ethereum has had a challenging start to this year. While assets like silver, gold, and U.S. stocks have generally risen in value, ETH has seen a decline of approximately 12% so far, positioning it as one of the weakest major assets. In contrast, Bitcoin [BTC] has managed a slightly better performance, while many altcoins have fared even worse.

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Investment is shifting toward metals and traditional risk assets, while Ethereum’s price seems stagnant. This trend may suggest a waning interest in the asset among traders. However, a price drop alone does not give the full picture of Ethereum's ecosystem.

Transactions Depict Ethereum's True Value

On an average day, the Ethereum Mainnet facilitates around $90 billion to $100 billion in stablecoin transactions, significantly surpassing other networks. Leon Waidmann, Head of Research at OnChainHQ, notes that these transactions predominantly involve USDT and USDC for purposes such as payments and treasury operations.

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While competing platforms are emerging, offering cheaper and faster transactions, the concentration of stablecoin volume remains on Ethereum where factors like trust, neutrality, and transaction finality are prioritized. Users are willing to pay higher fees, as a failed transaction in this context is not acceptable.

Large Holders and Their Accumulation Strategy

Interestingly, while Ethereum's price has stagnated, major investors are showing a different trend. ETH has consistently traded around the realized price of accumulation addresses, which reflects the average price at which long-term participants have entered. Instead of selling during this period of weakness, these investors have been accumulating more ETH.

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The situation is particularly intriguing, as the profits of these large holders have been nearly squeezed to zero—a typical indicator where many would usually reduce their exposure. Contrary to this expectation, the inflow to accumulation addresses has continued to rise, showcasing considerable patience among large holders.

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Rather than selling off as one might anticipate in a prolonged bear market, the increased purchases by these major holders reflect growing belief in Ethereum, suggesting it could be undervalued.

Conclusion

In summary, despite Ethereum's poor performance in terms of price in 2025, on-chain activity and the behavior of large holders present a more positive outlook. The continued accumulation by these significant investors may indicate that the general market is undervaluing this essential cryptocurrency. As Ethereum maintains its role as a leading platform for stablecoin transactions, it may still hold considerable potential for the future.