The recent crypto cycle has been unusual. While Bitcoin captured most of the attention, many altcoins struggled to show strong momentum. Even Ethereum, the second-largest cryptocurrency by market capitalization, barely moved beyond its previous cycle high from 2021.
Now that the market has cooled, investors are asking an important question: how strong is Ethereum’s long-term foundation?
A recent research report from Kulpa Research sparked debate by presenting a bearish thesis on ETH. The report challenges some bullish assumptions and highlights risks linked to Ethereum’s recent upgrades, network activity, and tokenomics.
This article breaks down the key arguments and what they might mean for the future of Ethereum.
Ethereum’s Core Use Cases
Despite criticism, Ethereum remains the backbone of many parts of the crypto economy. Its two most important roles today are:
Stablecoin settlement layer
Major stablecoins like USDT and USDC rely heavily on Ethereum.
Tokenization of real-world assets (RWA)
Financial institutions increasingly use Ethereum to tokenize assets such as bonds, funds, and commodities.
Because of this, Ethereum still hosts a large portion of DeFi activity and institutional blockchain experiments.
The Fusaka Upgrade and Network Growth
In December 2025, Ethereum introduced a major upgrade known as Fusaka.
The upgrade increased the gas limit from 30 million to 60 million, aiming to improve scalability and reduce transaction costs.
The immediate results looked impressive:
Ethereum transactions surgedActive wallet addresses increasedNetwork activity reached new highs
Ethereum co-founder Vitalik Buterin even suggested that the upgrade helped address Ethereum’s famous blockchain trilemma — balancing decentralization, security, and scalability.
For many investors, these metrics looked like a strong bullish signal.
But not everyone agrees.
A Different View: The Bearish Thesis
According to the research report, some of Ethereum’s positive metrics may be misleading.
Prominent Ethereum supporter Tom Lee, chairman of BitMine Immersion Technologies, argued that rising transactions and addresses show growing adoption.
At one point, he even predicted that ETH could reach $9,000 to $15,000.
However, the report claims that much of the network activity may not represent genuine user growth.
Instead, it may come from something far less positive.
The Rise of Address Poisoning Attacks
One of the most surprising findings involves a scam technique known as address poisoning.
Here’s how it works:
Attackers send tiny “dust” transactions to many wallets.
These transactions come from addresses that look similar to legitimate ones.
Victims may accidentally copy the fake address from their transaction history.
Funds are then mistakenly sent to scammers.
Before Fusaka, such attacks were more common on cheaper networks like BNB Smart Chain.
But after Ethereum transaction fees dropped dramatically, the network became more attractive for attackers.
Research suggests that:
95% of new active wallets could be linked to poisoning activity
Dust transactions may account for over 18–22% of Ethereum transactions
This means some of the network’s growth could actually be spam activity rather than real economic usage.
The Tokenomics Problem
The report also raises concerns about Ethereum’s economic model.
Ethereum’s supply dynamics rely heavily on fee burning, introduced through EIP‑1559.
Normally:
High transaction demand increases fees
More ETH gets burned
Supply becomes deflationary
But after the Fusaka upgrade:
Transaction fees dropped by more than 90%
Less ETH is burned
Validator earnings decline
Lower rewards could reduce incentives for validators to secure the network.
That raises questions about Ethereum’s long-term economic sustainability if the trend continues.
Institutional Perspective
Some analysts believe the situation may simply reflect market cycles.
High fees during 2021 were driven by speculation and NFT hype.
Today’s environment is more focused on real usage and infrastructure growth.
Even with these challenges, Ethereum still dominates several key sectors:
DeFi platforms
Stablecoin settlement
Real-world asset tokenization
Estimates suggest over 50% of tokenized RWAs operate on Ethereum, giving the network a strong institutional advantage.
The Next Upgrade: Glamsterdam
Ethereum’s roadmap continues.
A future upgrade known as Glamsterdam is expected to arrive in 2026.
The goal is to:
Improve censorship resistance
Optimize transaction execution
Increase scalability further
However, the upgrade could also increase the gas limit dramatically — potentially to 200 million.
If demand does not grow alongside capacity, it could put additional pressure on validator earnings and ETH supply dynamics.
Security Reminder for Crypto Users
Regardless of market outlook, one lesson is clear.
Address poisoning attacks are increasing across the crypto ecosystem.
To stay safe:
Always verify wallet addresses carefully
Avoid copying addresses directly from transaction history
Confirm addresses using explorers like Etherscan
A few seconds of verification can prevent major losses.
Despite the current concerns, Ethereum remains one of the most important infrastructures in the crypto industry.
It still leads in:
decentralized finance
stablecoin activity
tokenized assets
Bearish reports highlight real issues, but they also push the ecosystem to improve.
Historically, bear markets have been the time when the most important crypto innovations are built.
If Ethereum’s developers can address the emerging challenges, the network may emerge from this period stronger than before.
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