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Bitcoinist 2025-12-31 20:00:46

Ethereum TVL Still Quietly Defining ETH’s Long-Term Price Stability And Ecosystem Growth – What To Know

Ethereum is showing slight upward momentum once again, but the price still remains below the $3,000 level. Despite the fluctuating price actions in the past few weeks, certain structures and narratives that bolster the leading altcoin’s value are still holding strong, raising the potential for a major upswing. Rising TVL Reinforces ETH’s Price Foundation In the dynamic cryptocurrency landscape, Ethereum’s Total Value Locked (TVL) is still emerging as a subtle but powerful anchor for the altcoin’s long-term price stability and the growth of its evolving ecosystem. Over the past few years, this narrative has held strong, bolstering ETH’s price. While short-term price action still varies with overall market sentiment, ETH’s core value is being reinforced by the consistent concentration of capital throughout the network. Milk Road, a crypto and macro researcher, stated that the price of the altcoin has increasingly tracked the amount of capital that is present on the network. The development suggests that ETH’s valuation is becoming more structurally supported and less speculative. As a result, the network is maturing to a phase where price floors are primarily determined by utilization rather than hype. According to the expert, if the TVL expands meaningfully, the network’s economy simultaneously sees noticeable growth. This implies deeper liquidity, stronger collateral base, and more durable demand for block space and the network’s security. Milk Road highlighted that non-speculative capital, such as stablecoins , treasuries, Real-World Assets (RWAs), and on-chain asset management, are likely the major drivers of the rising TVL. Meanwhile, as the capital flowing from these areas continues to scale, ETH’s floor also rises outside of bull markets. However, it appears to be more difficult to break into bear markets. It is worth noting that the broader ecosystem’s resilience is strengthened when this occurs, and also improves the long-term valuation anchor. Why You Shouldn’t Be An ETH Bear After examining the value of ETH vs. the size of the Ethereum ecosystem chart, Emperor Osmo, a data analyst and researcher, declares that being an ETH bear now is not an ideal choice despite the current bearish state of the market. Osmo’s bold statement hinges on the major shift in Ethereum network fees. As blockspace becomes commoditized, the expert highlighted that ETH has moved from generating 90% of fees generated by Layer 1s to 2%. Despite this massive shift, the network continues to dominate in TVL and ecosystem growth. The chart shows that ETH trades are at $353.2 billion while the ecosystem built on top of the network trades at $330 billion, representing a 1.1x premium. According to Osmo, this trend makes the assumption that there is no growth, no value capture, and no liquidity inflows. At the time of writing, the Ethereum price was trading near the $3,000 mark, after recording a nearly 1% increase over the last 24 hours. Its trading volume is moving in the opposite direction to ETH’s price, dropping by more than 13% in the past day.

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