Three Reasons Ethereum Looks Cheap After a 38% Drop in Three Months
Three Reasons Ethereum Looks Cheap After a 38% Drop in Three Months
Despite its recent sharp decline, Ethereum continues to undergo technological evolution, leading analysts to suggest that it is undervalued by the market and that its appeal as a medium- to long-term investment asset is once again coming into focus.
According to investment outlet The Motley Fool on February 8 (local time), Ethereum (ETH) has been hit hard by deteriorating macroeconomic conditions even after its major 2025 upgrade, with its price falling by about 38% over the past three months. The current price stands at around $2,104.62, and critics say that improvements in network performance and cost reductions are not being adequately reflected in the price.
The Motley Fool noted that Ethereum is a rare asset capable of redesigning itself in a short period of time. The Pectra upgrade implemented in May 2025 simultaneously improved wallet user experience, enhanced staking efficiency, and expanded Layer 2 (L2) throughput. This was followed by the Fusaka upgrade on December 3, which significantly boosted the network’s ability to handle large-scale traffic by introducing Peer Data Availability Sampling (PeerDAS).
As a result of these technical advances, Ethereum’s average transaction fees have dropped by about 75% compared to three years ago, while the average cost of token swaps has fallen to around $0.30. While these changes clearly improved network usability, analysts say that lower fees alone did not directly translate into greater token value capture, limiting the impact on price recovery.
Another upgrade, Glamsterdam, is scheduled for 2026 and is expected to introduce new features such as enhanced censorship resistance. However, based on past cases, analysts caution that it is difficult to assume a price surge immediately after an upgrade, suggesting that buying solely in anticipation of a short-term “update effect” should be approached with caution.
Even so, The Motley Fool views Ethereum’s long-term value as intact, noting that it serves as the core settlement layer where Layer 2 solutions and on-chain finance ultimately settle. At current prices, an investment of $5,000 would secure approximately 2.5 ETH, which is considered sufficient exposure for betting on upside potential if the 2026 development roadmap proceeds smoothly. However, the outlet added that investors sensitive to volatility may be better served by maintaining a lower allocation.
*Disclaimer: This article is for investment reference only, and no responsibility is assumed for any investment losses based on it. The content should be interpreted solely for informational purposes.*
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