Ethereum hits a historic high but is "heading towards death"? The truth behind the big dump in revenue and the crazy buying by institutions.

In the past year, the price of Ethereum (ETH) has soared, reaching a historical high of $4,946 in August, with institutional funds pouring in as the main driving force. However, AJC, a researcher at the crypto analysis company Messari, has issued a shocking warning – despite the price hitting new highs, the fundamentals of Ethereum are “heading towards death.” This viewpoint has sparked heated discussions in the market: is it an apocalyptic prophecy, or hidden concerns masked by the price?

Price and Capital: Institutions are Frenziedly Acquiring ETH, ETF Inflows Hit Record Highs

Institutional Holdings: Since the beginning of June, enterprise-level Ethereum asset management firms have absorbed over 1% of the total supply of ETH.

ETF Fund Flow: Since the launch of the US spot ETH ETF in July 2024, it has accumulated inflows of nearly $3.9 billion, surpassing the inflow performance of Bitcoin ETFs during the same period.

Whale Accumulation: The four major holders, Bitmine, SharpLink Gaming, Bit Digital, and The Ether Machine, collectively hold approximately 2.7 million ETH, with a market value exceeding 12 billion USD.

These data show that institutional investors are confident in the long-term prospects of ETH and view it as a better capital allocation target than BTC.

Messari Warning: Plummeting Revenue is a “Death” Signal

The core argument of AJC comes from the drastic decline in revenue from the Ethereum network:

Revenue in August 2025: only $39.2 million

Year-on-year: down 75% compared to August 2023

MoM: Decreased by 30% compared to August 2024

Historical comparison: one of the worst monthly revenues since January 2021.

AJC believes that metrics such as active addresses, transaction volume, and throughput are “meaningless statistical data.” If the supply of stablecoins cannot improve circulation speed, it will be difficult to have a substantial impact on the fundamentals of ETH.

Counterarguments: Layer-2 Scalability and Application Revenue Hits New Highs

Messari research analyst Rick pointed out in response:

1. Application layer revenue and stablecoin supply both reached historic highs.

2. Layer-2 networks continue to expand, indicating that Ethereum remains the core infrastructure for decentralized applications.

3. Although the increase in activity indicators is limited, the trend is positive and does not indicate a sign of decline.

Dual Drivers of ETF and Bond Markets

In addition to ETFs, the demand for corporate bonds linked to ETH is also rising, reflecting traditional financial institutions' interest in the assetization of Ethereum.

Capital rotation: Investors are shifting from BTC funds to ETH ETFs.

Bond Demand: The incorporation of ETH as an underlying asset in government bond-type structured products has increased the momentum for long-term holding.

Key Contradiction: Price Surge vs. Fundamental Pressure

The market currently shows polarized signals:

Bullish Factors: Institutional capital inflow, strong demand for ETFs, Layer-2 expansion, and record-high application revenue.

Bearish camp: Significant decline in online revenue, sluggish user growth, insufficient circulation speed of stablecoins.

This contradiction means that Ethereum may still be supported by funding in the short term, but if revenues continue to be sluggish, long-term valuations will face challenges.

Conclusion

Messari researcher’s “Death Thesis” has sounded the alarm for the market—despite prices reaching new highs, the risk of deteriorating fundamentals cannot be ignored. In the coming months, the trend of ETH will depend on two key factors: whether network revenue can rebound and whether institutional funds can continue to flow in. This tug-of-war between price and fundamentals will determine whether Ethereum continues to lead the cryptocurrency market or falls into a high-level correction.