ETH supply turns inflationary while bulls point to changing investor mood

Ethereum sentiment is at a crossroads, as former supporters are re-evaluating the network’s usage. $ETH also trades around $2,100, with virtually no net gains for the past five years.

Ethereum is going through a ‘vibe shift’, according to David Hoffman, founder of Bankless. Hoffman recently sold all his personal $ETH holdings, and noted a shift on social media.

Hoffman, who has previously shown himself to be an Ethereum maximalist, recently started evaluating other crypto narratives, especially following the series of hacks in April. The shift to $ETH skepticism was seen as a strong sign that Ethereum may finally have other competitors, while facing a shift in crypto usage.

Currently, Bankless holds less than 1 $ETH in one of its public wallets. Crypto investor Ryan Adams also mentioned he would step back from direct control over Bankless, but remains bullish on crypto and Ethereum.

According to Messari, $ETH mindshare fell below its baseline in May and recovered slightly to 4.2%. Currently, Ethereum retains its legacy status as a network for DeFi and stablecoin payments, but sentiment remains relatively low.

Is Ethereum going through another crypto winter?

As of May 2026, $ETH sentiment remained neutral, based on the fear and greed index. $ETH open interest stands at $12.3M, near the one-year low mark. For now, $ETH derivative trading is more active compared to the 2022-2023 crypto winter.

$ETH is already down by over 55% of its peak from August 2025, after failing to climb to a higher price range. Ongoing spot market weakness and signs of selling pressure have weighed down on $ETH and prevented a price recovery.

According to Bitmine’s founder Tom Lee, the current $ETH sentiment may reflect the general despair due to decreased liquidity. Lee still believes Ethereum can become the settlement layer for global finance and serve as a platform for AI agents.

Agree with @RyanSAdams that a deep bench of leaders and developers are ready to ensure $ETH remains the future settlement layer of finance and AI

– to me, much of bearish sentiment reflects the disdain and despair seen at the nadir of crypto winter (finger pointing at the lows)…

— Thomas (Tom) Lee (not drummer) FundstratDirect.com (@fundstrat) May 21, 2026

Research by Santiment shows traders and other $ETH backers have recently shifted to an even worse sentiment. The recent exits from the Ethereum Foundation also put a question on the network’s goals. Santiment also noted Ethereum comments switched more negative in May, after holding up a more bullish attitude in April.

Additionally, the Ethereum Foundation heavily pushed L2 chains, which led to a brief bull market and increased liquidity for some networks. Now, the Foundation has taken up the task of scaling the L1 once again, while competing with networks that are already much faster and cheaper.

$ETH turns into an inflationary asset

Current $ETH activity happens at extremely low gas prices. As a result, more $ETH is produced each week. The Ethereum network no longer acts as sound money, and has achieved a 0.82% annualized inflation.

The inflation may be partially offset by staking. However, even staking nodes may need to sell or loan some of their $ETH to lock in profits. Currently, ecosystems like BNB Chain, Solana, and Hyperliquid show a larger speculative enthusiasm, while Ethereum lacks clear narratives and new trends to draw in traders.