Ethereum's Fundamentals Improve Despite Price Decline

According to CoinDesk, Ether (ETH) has experienced a decline of over 20% year-to-date, yet its underlying fundamentals are showing signs of improvement. A recent research report by Wall Street bank Citi highlights a significant increase in the total value locked (TVL) on the Ethereum blockchain. Despite recent volatility in user activity, analysts led by Alex Saunders suggest that the fundamental outlook for Ethereum is not as uncertain as it may appear. Citi's report points out that the TVL on the Ethereum network has seen a substantial rise. Additionally, ether exchange-traded funds (ETFs) continue to attract inflows, and there is a growing interest in search queries related to Ethereum. Following the U.S. election in November, ether ETF flows turned positive, with total inflows reaching $3.2 billion since their launch in July. However, the report also notes that the growth of user activity on layer-2 solutions and competing blockchains like Solana has sparked discussions about Ethereum's competitive edge. U.S. President Donald Trump's World Liberty Financial reportedly holds more than $200 million worth of ether. This investment could be perceived as an incentive for the U.S. to bolster its support for the cryptocurrency industry. The report further suggests that the relative performance of ETH and other altcoins might reflect the industry's optimism regarding potential regulatory clarity in the U.S. Meanwhile, Citi observes that the weakness in ether has coincided with a rise in bitcoin (BTC) dominance, which has reached multi-year highs above 60%.