Ethereum (ETH) has been on a run, shooting up to prices not seen since late 2021. This price rally is based on the strong institutional interest and positive market sentiment. Engagement in the NFT market has plummeted. Li Wei, a blockchain content strategist, explores the conflicting trends, assesses the sustainability of the rally, and offers insights for investors navigating this uncertain landscape.

The Tale of Two Markets: ETH Up, NFTs Down

Ethereum’s recent success has been due to many reasons. The recent Pectra upgrade that was introduced in May keeps providing a boost to demand and inflows. This enhancement focuses on maximizing network efficiency and scalability, helping Ethereum become more appealing to developers and users in the process. Institutional adoption is proving to be an important factor. In fact, large investors, like BlackRock, have moved to acquire ETH, which is a strong signal they believe in the long-term fundamentals of the cryptocurrency. To illustrate this point, consider that on July 10, BlackRock purchased 60,674 ETH ($158.6M)—confirmation that this trend is real.

To further extend the bullish momentum, Ethereum spot ETFs have notched incredible inflows so far. Just last week, these ETFs pulled in $204.9 million, including 16 straight days of net inflows exceeding $890 million. Looking at it from a technical standpoint, Ethereum has recently broken the $4,200 resistance on extreme volume inflow. It is currently consolidating near the 0.065-0.075 BTC resistance zone, a clear breakout above which may start a new altcoin season. Corporate adoption is accelerating like never before. Recent ETH treasury buys by public companies such as SharpLink Gaming indicate that these firms are making moves reflecting their strong conviction in ETH’s long-term value.

Despite Ethereum’s meteoric rise, the NFT market is currently in free fall. A confluence of factors have catalyzed this decline. Environmental concerns, lack of real-world utility, and the popping of a speculative bubble all were key factors.

Why NFTs Lost Their Luster

Several reasons have contributed to the decline in the NFT market:

  • Environmental Impact: The environmental impact of NFTs, particularly those on proof-of-work blockchains, has been a major concern. A single NFT transaction can use as much energy as an average household does in several days.
  • Lack of Real-World Utility: Many NFTs lack real-world utility, leading to a decline in interest as the initial hype fades.
  • Speculative Bubble: The 2021 NFT hype was largely a speculative bubble, with many investors seeking quick profits without considering the underlying value or risks.
  • Over-Saturation and Lack of Quality: The NFT market has become over-saturated with low-quality projects. More than 95% of NFT collections are now considered worthless. Even prominent NFT collections have experienced significant reductions in price, trading volume, and overall interest.
  • Security Concerns: The prevalence of Discord hacks and scams in the NFT space has made it less attractive to potential buyers.

Institutional Appetite vs. On-Chain Activity

Now institutional investors can’t get enough exposure to ETH. Adding in their very large purchases of late, $4.17 billion, plus $461 million in ETF inflows this year, is remarkable. Whale and corporate wallets have together stashed more than 3 million ETH ($12 billion). And now, it seems, a massive wave of institutional investment has once again played a role in Ethereum’s latest price breakout. On August 10, 2025, the cryptocurrency skyrocketed to $4,300, its highest value since late 2021. Increased trading volumes, with daily activity now up to $70 billion, further confirm this institutional interest.

Today institutional investors are really starting to dive into tokenization. In reality, 47% of hedge funds and asset managers intend to tokenize their own assets, and 60% of surveyed institutions are ready and willing to invest in tokenized assets. The overall NFT market is in a bit of a slump at the moment. Interest from institutions in the underlying technology and its potential use cases remains resilient.

The Sustainability Question: PoS and Centralization

On September 15, 2022, Ethereum took a historic step forward with the Merge, its transition from proof-of-work (PoW) to proof-of-stake (PoS). This simple change reduced its electrical energy requirement by at least 99.84%. This change has been celebrated as a green, sustainable replacement for PoW.

A limited number of large corporations control most of the staked ETH. Today, Lido, Coinbase, Kraken, and Binance control 54% of it, leading some experts to warn that the network is at risk from sudden changes in government policy. This increasing centralization may have serious consequences for the long-term sustainability and decentralization of the Ethereum network.

Navigating the Uncertain Landscape: Advice for Investors

ThrowingToken.com recommends:

  • Diversify Your Portfolio: Instead of putting all your eggs in one basket, diversify your investments across different types of NFTs or even other asset classes. This reduces the risk of significant losses if one particular asset class underperforms.
  • Do Your Research: Before investing in any NFT project, conduct thorough research on the team, the project's roadmap, and its potential for long-term value.
  • Understand the Risks: Be aware of the risks associated with investing in NFTs, including the potential for scams, rug pulls, and price volatility.
  • Stay Informed: Keep up-to-date with the latest news and developments in the Ethereum and NFT ecosystems to make informed investment decisions.

Ethereum’s price has exploded by over 1300%. At the same time the NFT market is crashing, highlighting the unpredictable and confusing world of crypto. Now, institutional interest and technological advancements are starting to light Ethereum’s fuse. The NFT market is reeling from real issues such as utility, environmental concerns, and security. By understanding these trends and adopting a cautious, diversified approach, investors can navigate this uncertain landscape and potentially profit from the opportunities that arise.