Down 62% From Its Highs, Is Ethereum a Buy Right Now?

Last August, Ethereum (CRYPTO: ETH) reached an all-time high of nearly $5,000. Investors were excited, and some analysts were predicting it could surpass $10,000 by the end of the year.

Instead, it went into free fall and sits at about $1,900 at the time of this writing (Aug. 11). The entire crypto market is experiencing a downturn, so this isn't unique to Ethereum. But is this a buying opportunity, or are you better off staying away for now?

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The bull case: Key metrics are starting to improve

Although it's too early to say Ethereum has turned things around, it has been building positive momentum. Its price has recovered from the low point it hit in early summer, and it's up about 4% over the last month.

In part, that's due to renewed institutional interest. Ethereum ETFs had inflows of $245 million in the first week of August, the highest total in nearly four months. That was also the fifth straight week of positive inflows.

Ethereum also continues to dominate the tokenized real-world asset (RWA) sector. This is a rapidly growing market, as RWA spot trading volumes grew 220% from Q2 2025 to Q2 2026. RWA deposits across lending platforms and decentralized exchanges grew even more, from $2.3 billion to $7.4 billion. Nearly 70% of RWA deposits for RWA-backed lending are on Ethereum, meaning it's the leading blockchain for on-chain lending collateral.

Ethereum's biggest advantage over competitors is its network effect as the first major smart-contract blockchain platform. It has the largest developer community and user base, and it's the most widely used blockchain for decentralized finance (DeFi), RWAs, and stablecoins, three of the main real-world applications for blockchain technology.

Ethereum faces stiff competition and regulatory concerns

The downside of being the leader in DeFi, RWAs, and stablecoins is that these are highly competitive arenas, and many other blockchains are trying to cut into Ethereum's market share. Solana is its main rival, boasting much faster and cheaper transactions, but BNB Chain, Cardano, and Avalanche also offer many of the same capabilities as Ethereum.

The crypto market also suffered a blow when the U.S. Senate delayed voting on the Clarity Act, which is designed to provide a regulatory framework for cryptocurrencies. Ethereum is one of the cryptocurrencies that could benefit the most from this, as the Clarity Act could eliminate ambiguity around DeFi and give major financial institutions clearance to start building on-chain.

Should you buy Ethereum right now?

Ethereum is one of the few cryptocurrencies that has demonstrated legitimate real-world value, and it has the largest developer community of any blockchain. It has also proven to be fairly resilient, ranking as the second-largest cryptocurrency, behind only Bitcoin.

With that in mind, the current dip looks like a good opportunity for crypto investors to add Ethereum at a reasonable price. However, like most cryptocurrencies, Ethereum is volatile, and there's no guarantee it will rebound. Because of the risk involved, Ethereum and other cryptocurrency investments work best as a small part of your portfolio, and only if you're confident you can hold long-term through the ups and downs.

Lyle Daly has positions in BNB, Bitcoin, Cardano, Ethereum, and Solana. The Motley Fool has positions in and recommends Avalanche, Bitcoin, Ethereum, and Solana. The Motley Fool recommends BNB. The Motley Fool has a disclosure policy.