Ethereum (ETH): what it is, why it scores well, and what to watch
The network most of crypto is actually built on, and the first to offer institutions a fund that pays a yield.
We show this whichever way it has gone.
What it is
If Bitcoin is digital money, Ethereum is a computer that anyone can use and nobody owns. Developers publish programs to it that then run exactly as written, without a company able to change or switch them off. Most of what exists in crypto, from lending markets to stablecoins to tokenised shares, runs on Ethereum or on networks built to extend it. ETH is the coin used to pay for that computing and to secure the network.
What it is used for
Developers use it as the foundation for applications. Users pay in ETH whenever they do something on the network. Holders can lock ETH up to help run it and earn a return, which is closer to earning interest than to speculation. Institutions increasingly hold it through regulated funds.
Why it stands out
The case for it
- It became the first crypto asset to offer a yield through a regulated fund. A major asset manager launched a staked Ethereum product on Nasdaq in March 2026, which means institutions can now hold it and earn a return without touching the technology.
- It is where the serious building happens. The majority of stablecoins, lending markets and tokenised real-world assets sit on Ethereum or on networks that settle back to it, which makes it very hard to displace.
- Holding it pays you. Unlike most assets in crypto, staking produces an ongoing return funded by network activity rather than by issuing new tokens to newcomers.
- Institutional interest has been persistent. Ethereum funds have run multi-day inflow streaks even during periods when the wider market was weak.
- The infrastructure built for Bitcoin now extends to it. Custody, compliance, adviser distribution and legal frameworks already exist, so each new product takes less work than the last.
What to watch
Things to keep an eye on
- It is a long way below its high. The asset trades far under its August 2025 peak, so patience has been required and may be required for a while yet.
- Faster rivals keep taking share. Newer networks handle more activity at lower cost, and while Ethereum settles the most valuable transactions, it is not where the most transactions happen.
- Its own extensions can compete with it. The networks built to make Ethereum cheaper also move activity, and the fees that come with it, off the main chain.
How it scored when written
Key figures
About the Base layer networks sector
A base layer network is the foundation everything else is built on. It keeps the record of who owns what, and it is maintained by thousands of independent computers rather than one company. Because no single party controls it, changing the rules requires broad agreement, which makes these networks slow to change but very hard to shut down.
These are the assets institutions reach for first. They have the longest track records, the deepest trading, and the clearest regulatory position, which is why exchange-traded funds arrived here before anywhere else. When money leaves crypto it usually leaves everything except these; when it returns, it usually arrives here first.
What to watch: Whether the money arriving through regulated funds keeps arriving, since that has become the main source of demand. Also how much of the network's value depends on adoption versus on interest rates and the wider mood in markets.
What we could not verify
The 100% above means every metric the score uses resolved cleanly. Separately, these cannot be measured from free public sources at all, so they sit outside the model rather than being estimated.
Others in this sector
Other reports
Frequently asked
What is Ethereum used for?
Developers use it as the foundation for applications. Users pay in ETH whenever they do something on the network. Holders can lock ETH up to help run it and earn a return, which is closer to earning interest than to speculation. Institutions increasingly hold it through regulated funds.
Is Ethereum a good investment?
We do not give investment advice. Ethereum scores 9.7 of 10 for Quality and 3.5 for Risk on 100% verified data. The bull case and the risks are both set out above so you can weigh them yourself.
What should I watch with Ethereum?
It is a long way below its high. The asset trades far under its August 2025 peak, so patience has been required and may be required for a while yet. Faster rivals keep taking share. Newer networks handle more activity at lower cost, and while Ethereum settles the most valuable transactions, it is not where the most transactions happen.
What is the Base layer networks sector?
A base layer network is the foundation everything else is built on. It keeps the record of who owns what, and it is maintained by thousands of independent computers rather than one company. Because no single party controls it, changing the rules requires broad agreement, which makes these networks slow to change but very hard to shut down.
How has Ethereum performed since this report?
Since publication on 1 September 2026, ETH has moved -1.9%. We show this regardless of direction.
Not financial advice. These are assets that score well on our framework, so the report leads with why. It also sets out what to watch, because a report that only tells you good news is not worth reading. It is not a recommendation, and it takes no account of your circumstances. Scores are the mechanical output of a published framework applied to public data. Digital assets are volatile and you may lose everything you put in. Verify all figures independently.