Ethereum's Price Plummets Below $2,000 Amid Weakening Demand and Institutional Outflows

Ethereum's price has fallen below the crucial threshold of $2,000, marking a significant milestone for the cryptocurrency. According to on-chain analytics firm Nansen, this decline is not solely due to macroeconomic uncertainty but rather structural demand erosion. As user transactions and smart-contract activity have slowed down, the amount of ETH being burned has also decreased.

The expansion of Layer 2 networks has contributed to Ethereum's weakening economic viability. Much of the transaction volume and fee revenue that previously went to the mainnet has shifted to Layer 2s, reducing the value of Ethereum's main chain. Nansen researcher Nicolai Sondergaard notes that lower burn levels are making ETH look more like an inflationary asset again.

Institutional flows have also deteriorated, with US spot Ethereum ETFs posting net outflows since May 11. The largest monthly outflow since December 2025 has reached $522 million, further indicating a decline in investor confidence. Despite this, whale investors have continued to accumulate ETH, with wallets holding at least 100,000 ETH now controlling approximately 22% of the total supply.