Ethereum’s Rising Influence in the Cryptocurrency Market
In a market atmosphere that remains generally bearish, Ethereum has begun to demonstrate resilience and potential in certain areas. Notably, this prominent altcoin has surpassed Bitcoin, the largest digital currency, in a pivotal metric that underscores its growing industry strength.
Ethereum Leads in a Crucial Industry Metric
According to a recent analysis by Leon Waidmann, a renowned market analyst and head of the On-Chain Foundation, Ethereum has taken the lead over Bitcoin in a significant industry metric. This development reflects Ethereum’s increasing momentum, possibly driven by its evolving ecosystem, heightened institutional interest, and burgeoning network activity.
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Waidmann’s report indicates that Ethereum has overtaken Bitcoin in one of the most critical adoption metrics: the proportion of total supply held by Digital Asset Treasuries (DATs). More corporate treasuries, investment firms, and blockchain-native companies are opting to retain ETH over BTC, signaling a shift in the market narrative.
Currently, data reveals that ETH treasury entities hold 4.3% of the total supply, surpassing BTC’s 3.6%. This achievement marks a significant milestone for Ethereum, highlighting its foundational importance within the cryptocurrency ecosystem and its growing institutional adoption.
Why Ethereum’s Lead Makes Sense
Waidmann explains that Ethereum’s advantage in this metric is logical. It boasts a multitude of stakeholders with genuine operational needs, unlike Bitcoin. These stakeholders include layer 2 solutions, decentralized finance (DeFi) protocols, decentralized autonomous organizations (DAOs), foundations, treasury firms, government bodies experimenting with blockchain infrastructure, and numerous web3 projects. If this trend persists, Waidmann predicts that major stablecoin issuers may also consider acquiring a strategic stake in the Ethereum blockchain.
A Decline in Engagement Across Ethereum’s Network
Despite Ethereum’s recent achievements, there has been a noticeable decline in network activity following a drop in ETH’s price. This decline is unusual for an ecosystem that typically leads in long-term engagement. Waidmann reports that weekly active wallet addresses in the Ethereum ecosystem have decreased after a period of heightened activity.
As per the Ethereum Weekly Engagement chart, active ETH wallet addresses have fallen to over 8.2 million from a high of 20 million in June 2025. This decrease suggests a temporary slowdown in user engagement with DeFi, NFTs, and on-chain transactions.
Factors Behind the Decline
Currently, network activity has decreased by more than 60%, although layer 2 interactions remain stable. Nonetheless, the overall ecosystem usage is trending downward. Waidmann attributes this sharp decline to a reduction in airdrop-farming activities across Layer 2 solutions.
However, ETH’s withdrawal from crypto exchanges indicates a renewed confidence in its price potential. In the past 30 days, 700,000 ETH have been moved out of exchanges, signaling accumulation. Merlijn The Trader notes that although this supply shock does not initially appear bullish, it could become evident once the market adjusts.
Conclusion
Ethereum’s increasing dominance in key metrics reflects its growing influence within the cryptocurrency market. Its evolving ecosystem and institutional interest are driving this shift, despite a recent decline in network engagement. As the landscape continues to evolve, Ethereum’s role in the digital asset space is becoming more pronounced, shaping the future of cryptocurrency.
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