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Despite the sharp price declines and weakening market sentiment seen recently in the crypto market, institutional investors appear to be shifting their focus away from short-term price movements toward on-chain data. While rising volatility and a risk-off environment continue to pressure prices, major financial institutions are closely monitoring network usage and fundamental indicators. In this context, U.S. investment bank Goldman Sachs shared a notable assessment, emphasizing that Ethereum’s core fundamentals remain strong regardless of its price performance. According to the bank, growth in user numbers, transaction volume, and overall network activity shows that Ethereum’s long-term value proposition has not weakened and that current prices do not reflect these fundamentals.
Goldman Sachs: Prices Are Weak, Fundamentals Are Strong
According to Goldman Sachs, although the overall price outlook in the crypto market remains weak, on-chain data presents a much more positive picture for Ethereum. The bank highlighted a clear divergence between price action and user-behavior indicators, noting that fundamental activity on the Ethereum network is gaining momentum. In this regard, Goldman Sachs stated that in January, the average daily number of new addresses on the Ethereum network far surpassed levels seen during the “DeFi Summer” of 2020, a period widely regarded as a major turning point for the crypto market. This data shows that the number of new users joining the Ethereum ecosystem has reached historically strong levels, indicating that network usage and user interest continue to grow despite weak prices.
Following recent declines in major crypto assets such as Bitcoin, Ethereum, and Solana earlier in the week, a limited recovery was observed. However, Goldman Sachs stresses that on-chain activity should be the primary focus. According to the bank’s data, Ethereum’s daily active addresses increased by 27.5% month-over-month, while the number of new addresses rose by 26.8%. Over the same period, transaction count recorded a notable 36% increase. A similar trend is seen on Solana: daily active addresses increased by 24.3%, while transaction volume rose by 8.2%. These figures demonstrate that user activity across major networks is being sustained despite ongoing price pressure.
Record Address Growth on Ethereum and Market Cap Insight
Goldman Sachs reported that the average daily number of new Ethereum addresses reached a record level of 427,000 in January. This figure is significantly higher than the roughly 162,000 daily average seen during the DeFi Summer of 2020. In addition, daily active addresses climbed to around 1.2 million based on the 7-day moving average, marking a new peak. The bank also noted that Ethereum’s current market capitalization has fallen below its realized market capitalization, indicating that a substantial portion of ETH holders are currently at a loss at these price levels.
ETF Flows and Expert Commentary
Timothy Misir, research director at digital asset analytics firm BRN, emphasized that ETF inflows play a decisive role in achieving a sustainable recovery in the crypto market. According to Misir, consistent and steady institutional capital inflows are critical for building confidence, regardless of short-term price movements. He commented:
“Consistent ETF inflows are a key indicator for cryptocurrencies. Without this support, it is difficult for a rally to be sustainable.”
According to Goldman Sachs’ analysis, despite short-term price pressure, Ethereum continues to preserve its long-term potential thanks to strong network activity, increasing user adoption, and rising transaction volume. On-chain data suggests a growing divergence between market sentiment and fundamental indicators, indicating that Ethereum may remain firmly on the radar of institutional investors.
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