Ethereum, the second-largest cryptocurrency by market cap, suffered its steepest monthly decline in more than two years this August amid weak demand for ETH-focused ETFs and growing technical criticism.

The asset’s price fell by 22% to around $2,500, its worst performance since June 2022.

“Marginal new buyers don’t see value at current prices,” said Quinn Thompson, founder of crypto hedge fund Lekker Capital, citing the lack of interest from new buyers. Thompson suggested that Ethereum’s price may need to fall further before it attracts new investment.

The launch of Ethereum ETFs, which many hoped would boost the asset, has instead seen significant outflows. In its first 29 days of trading, these ETFs saw $477 million in outflows, in stark contrast to the $5.1 billion inflows for Bitcoin ETFs following their January debut.

The decline in institutional interest in Ethereum is compounded by broader negative sentiment. Brian Rudick, a researcher at crypto trading firm GSR, noted that declining network fees are fueling pessimism. As more Ethereum transactions move to more efficient layer-2 blockchains like Coinbase’s Base network, fees on the main Ethereum network have decreased, affecting Ethereum’s economic model. This shift has made ETH, once deflationary, inflationary again, making it an undesirable trait among crypto advocates.

The bearish trend is also reflected in Ethereum’s derivatives markets, where the Block Scholes Ethereum Senti-Meter, which measures sentiment in these markets, recorded readings below 40 out of 100 for the entire month of August, indicating a predominantly negative outlook.

Ethereum’s recent struggles have been exacerbated by competition from other cryptocurrencies. Bitcoin continues to be a preferred option for investors, especially with figures like presidential candidate Donald Trump advocating for a national Bitcoin reserve. This positions Bitcoin as a strategic asset tied to Trump’s election chances, while Ethereum struggles to define its role amid Bitcoin’s store of value status and Solana’s reputation as a high-performance blockchain.

*This is not investment advice.