Ethereum (ETH -1.82%) trades near $1,747, off 65% from its August 2025 peak near $5,000, disappointing longtime holders and tempting sidelined buyers.
Per one metric based on the asset's cost basis, called the market value to relative value (MVRV) z-score, the coin's valuation has reached this depth only twice before in its history, in late 2018 and mid-2022. For reference, most of its holders are underwater relative to their cost basis right now, which is why that metric is so unusually low. Whether the third visit follows the same pattern is the question worth answering.
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Valuations are often cyclical
In both late 2018 and mid-2022, Ethereum was at a crossroads.
With two years of roaring bull markets firmly in the rearview mirror in both cases, the general sentiment among crypto investors was that the party was over and unlikely to ever restart. Nonetheless, both of those stretches where most holders were deeply in the red preceded major recoveries, though dip buyers waited months for the payoff. And those circumstances map quite closely to where the coin is today, with the additional twist that its five-year performance has been bad for holders despite some wild bullish episodes along the way.
CRYPTO: ETH
Key Data Points
The point here is that steady accumulation of Ethereum through the worst of the undervaluation zone in its bear market paid off across the bull cycle that followed. History says that buying this coin right now is probably a good move.
The pattern may not work this time around
There are a couple of caveats that investors need to appreciate before even thinking about buying Ethereum on the dip here.
The MVRV cost basis signal is a statistical claim about how the average dip buyer has fared leading up to the present moment. The metric can still deepen before reversing. In other words, a "cheap" coin today can become dramatically cheaper.
The bigger issue is the question of whether Ethereum's protocol economics actually reward its holders for network activity. The answer is no. The coin's supply is currently inflating at a rate of around 0.9% per year, thereby diluting holders over time, despite plenty of the very network activity that is supposed to provide them with a return by way of transaction fees and token burns reducing the asset's outstanding supply.
If protocol mechanics do not translate network activity into holder value, the average buyer of the past few years is right to pay less. This is a problem because it undermines the idea that the coin's bargain pricing is just a temporary state of affairs awaiting correction by the market once investors realize the asset is priced too cheaply.
For investors who are looking to allocate capital and hold it for years, accumulating some Ethereum at these levels is the kind of asymmetric setup that has historically rewarded patient buyers. But it might not be wise to expect the coin to bounce upward as hard as it has in the past, as its fundamentals now look weaker.
