Citi Analyst: Ethereum’s Performance Has Lagged Since the Beginning of the Year, but Fundamentals Are Improving

Citi Analyst: Ethereum's Performance Has Lagged Since the Beginning of the Year, but Fundamentals Are Improving

Citi Analyst: Ethereum's Performance Has Lagged Since the Beginning of the Year, but Fundamentals Are Improving

According to a report by CoinDesk, Citigroup stated in a research report on Monday that Ethereum (ETH) has underperformed since the beginning of the year, with a decline of over 20%, but its fundamentals are improving, and the Total Value Locked (TVL) on the Ethereum blockchain has significantly increased.

The Citigroup report pointed out that stronger user growth on Layer 2 networks and other blockchains (such as Solana) has raised doubts in the market about Ethereum’s competitive advantage. However, analysts mentioned some changes in fundamental data, including a significant increase in TVL, continued inflows into Ethereum exchange-traded funds (ETFs), and rising search popularity.

The report highlighted that after the November U.S. election, the flow of funds into Ethereum ETFs turned positive, with a total net inflow of $3.2 billion since their launch in July last year.

Daily net fund flows of Ethereum spot ETF from November 2024 to present (Source: SoSoValue)

The bank stated that the cryptocurrency project World Liberty Financial, supported by former U.S. President Donald Trump, holds over $200 million worth of Ethereum, which can be seen as “an additional impetus to strengthen U.S. support for the crypto industry.”

Citigroup also noted that Ethereum’s weakness coincides with the rise of Bitcoin’s dominance, with Bitcoin’s market share currently at a multi-year high of over 60%.