In a startling development, Ethereum’s value against Bitcoin has reached its lowest point since May 2020, igniting intense scrutiny and speculation across the cryptocurrency community, as reported by Justin Sun, founder of Tron, on X. This plunge, coupled with rumors of potential Ethereum Foundation liquidation, marks a critical moment for the second-largest blockchain network.
According to X posts and web reports, Justin Sun’s query on March 12, 2025—“What exactly happened to Ethereum?”—resonated widely, reflecting broader market unease. Sources say Ethereum’s ETH/BTC pair has declined sharply, with the Ethereum Foundation reportedly locking significant ETH into MakerDAO, risking a $900 million liquidation if prices drop to $1,100. However, the Foundation has clarified, via an X statement, that it faces no immediate liquidation risk, despite a $78 million DAI debt tied to this strategy.
The investigation into Ethereum’s downturn reveals a complex interplay of factors. Confirmed by CoinDesk, Ethereum’s price stood at $1,898.12 on March 12, 2025, down 8.6% recently, with a market cap of $228 billion. Furthermore, web reports from Coinpedia.org highlight the Foundation’s treasury shrinking from $1.6 billion to $970 million over two years, exacerbating financial pressures amid market volatility. Meanwhile, the recent Pectra upgrade, aimed at enhancing scalability and reducing fees, has faced delays and technical hiccups on testnets like Sepolia, raising concerns about Ethereum’s development pace, as noted by BanklessTimes.com.
Historically, Ethereum has navigated challenges like high gas fees and competition from blockchains such as Cardano and Polkadot, often dubbed “Ethereum killers” for their scalability claims, per TheStartupMag.com. In the wake of the 2024 Dencun upgrade, expectations were high for Ethereum’s efficiency, but the current price drop—down 60.98% from its all-time high—underscores persistent struggles. QuickNode’s analysis of Pectra, deployed on testnets in early 2025, emphasizes improvements like increased staking limits (from 32 to 2,048 ETH per validator), yet these haven’t stemmed the tide.
According to blockchain expert Charles Wayn of Galxe, quoted in Reuters, “The brutal sell-off in crypto, including Ethereum, reflects market jitters from global economic pressures and technical challenges.” Insiders reveal that Ethereum’s reliance on layer-2 solutions and its proof-of-stake transition since 2022 haven’t fully insulated it from volatility, particularly as Bitcoin dominates institutional interest.
ICYMI: $ETH/ $BTC HIT LOWEST LEVEL SINCE MAY 2020 pic.twitter.com/L495E7s0Kl
— DEGEN NEWS (@DegenerateNews) March 12, 2025
The impact of this decline is urgent, with potential cascading liquidations threatening Ethereum’s stability. Liquidation clusters at $1,926, $1,842, and $1,793, as reported by BanklessTimes.com, could exacerbate price drops if breached. Moreover, the ETH/BTC ratio’s historic low—highlighted in X posts with charts showing a sharp downward trend—signals shifting investor confidence toward Bitcoin.
In summary, Ethereum’s valuation crisis against Bitcoin, coupled with Foundation financial maneuvers, underscores a pivotal moment for the network. The bottom line is that as technical upgrades progress and market dynamics evolve, the cryptocurrency community awaits further clarity on Ethereum’s trajectory. Key takeaways include the Foundation’s denial of liquidation risks, the Pectra upgrade’s mixed progress, and the urgent need for strategic adjustments to restore investor trust.
