<div id="readability-page-1"><div><div><p>In May 2026, amidst a general recovery in the crypto market, Ethereum (ETH), once the undisputed king of public blockchains and the supporter of the world's largest DeFi and NFT ecosystem, experienced a distinctly weak performance, suffering a series of devastating blows including the mass exodus of its core technical team and significant selling by Wall Street institutions. On May 16th, Ethereum fell by over 4%, hitting a low of $2,200, while Bitcoin also dropped below $79,000. This sell-off resulted in over 150,000 accounts being liquidated within 24 hours. Even more worryingly, the downward trend continued throughout May. On May 18th, Ethereum fell again by 3.60%, closing at $2,115. Another 112,500 people across the network were liquidated, totaling $676 million. [Image of core development team at the bottom] For the public blockchain sector, the core development team is the lifeblood of protocol iteration, vulnerability maintenance, and technical upgrades, and is also the core moat that has kept Ethereum leading the industry for many years. However, in the past six months, the Ethereum Foundation has experienced its largest and most significant wave of core talent departures since its inception, completely undermining the foundation of its underlying technology development. Industry concerns about the risk of a technological gap in Ethereum continue to escalate. This wave of departures covers the entire core chain of Ethereum, including the consensus layer, protocol layer, scaling, and client maintenance, with many veteran technical backbone members leaving the organization. Among them, Carl Beek, the core developer of the Beacon Chain who spearheaded the historic upgrade from Ethereum's PoW to PoS, has officially resigned. He is a key contributor to the reform of Ethereum's consensus mechanism. Julian Ma, a senior researcher who led the design of Layer 2 scaling optimization and cryptoeconomics, has also announced his departure. His core proposals, such as EIP-7805, are crucial for improving the efficiency of Ethereum's Layer 2 network interactions. In addition, Tim Beiko and Barnabé Monnot, core leaders of the protocol team, have successively left their core R&amp;D positions. Former co-executive director Tomasz K. Stańczak, Josh Stark, a key figure in the underlying development, and several other veterans with seven years of experience have also left. Alex Stokes, the co-leader of the protocol, has even taken an indefinite leave of absence. In just a few months, over ten key Ethereum developers have left, directly causing a severe talent gap. This exodus stems from two main issues: First, the Ethereum Foundation exhibits a highly centralized structure, with top management dominating technical roadmap planning, hard fork upgrades, and resource allocation. This leaves frontline core developers with little say and their years of technical contributions going unrecognized. Second, the incentive mechanism is severely misaligned. Despite Ethereum's market capitalization exceeding hundreds of billions and the Foundation holding hundreds of millions of dollars in reserves, it has consistently suppressed the salaries of core developers. Several senior core developers with seven years of experience earn only around $600,000 pre-tax annually, a severe mismatch between effort and reward. Meanwhile, the foundation's strategic focus shifted, prioritizing commercial marketing over underlying R&amp;D. A large amount of funding was allocated to public relations and external investment, neglecting investment in core technology iteration. This, coupled with the impact of new public chains and the high-salary poaching by the AI ​​industry, led to the complete disillusionment and departure of a group of idealistic technology developers who had persevered for many years. The direct consequences of this talent drain are already evident: key upgrades such as ePBS scaling, quantum security, and protocol refinement have all stalled; the efficiency of fixing underlying vulnerabilities has significantly decreased; and Ethereum's core advantage of continuous technological iteration is rapidly eroding, leaving its long-term development path uncertain.</p><h2><strong><span>Wall Street's significant reduction in holdings</span></strong></h2><p><span><span>While the technical fundamentals collapsed, the concentrated withdrawal of Wall Street institutions dealt a fatal blow to Ethereum. The combined negative impact of funding and technical factors completely shattered market bullish confidence.</span></span></p><p><span><span>According to Goldman Sachs' Q1 2026 13F filing, a major structural rebalancing of its cryptocurrency portfolio was completed, with a clear core strategy:</span></span><strong><span><span>Maintaining a hold on Bitcoin, significantly reducing Ethereum holdings, and liquidating small and medium-sized public chain assets</span></span></strong><span><span>. Data shows that Goldman Sachs drastically reduced its holdings in the iShares Ethereum ETF (ETHA) by 70%, leaving it with only $114 million after the reduction. This reduction far exceeded that of Bitcoin ETFs during the same period. In contrast, Goldman Sachs only slightly reduced its holdings in Bitcoin ETFs, maintaining a core position of nearly $700 million, demonstrating its recognition of Bitcoin's safe-haven properties as &#34;digital gold&#34; and its cautiously bearish stance on Ethereum. Not only Goldman Sachs, but mainstream crypto ETFs also experienced continuous capital outflows, with a clear trend of capital flight from the Ethereum sector. Market data shows that Fidelity's FETH product saw a monthly outflow of $62.26 million, and BlackRock's ETHA product saw an outflow of $26.31 million. None of the top ten mainstream Ethereum ETFs saw net inflows, with nearly $100 million in continuous capital flight completely shattering the market narrative of institutions' long-term investment in ETH. On-chain data corroborates the bearish trend, with retail investors selling nearly 1.5 million ETH in the past two weeks. Whales continue to transfer on-chain assets to centralized exchanges, accumulating momentum for a subsequent sell-off and profit-taking, leading to a sustained accumulation of selling pressure in the market. It's worth noting that Goldman Sachs' recent portfolio adjustments are not a complete bearish stance on the crypto industry, but rather a strategy to mitigate the uncertainties associated with public blockchain technology and complete a structural shift in the sector. Institutional funds have completely withdrawn from on-chain assets such as ETH, SOL, and XRP, which rely on team iterations and have fragile consensus, while significantly increasing their holdings in compliant crypto financial platform stocks such as Circle, Galaxy Digital, and Coinbase. Essentially, this represents an abandonment of highly uncertain public chain tokens and an embrace of highly certain crypto financial assets, signifying a complete restructuring of mainstream institutions' valuation logic for Ethereum. The recent concentrated negative crisis affecting Ethereum is a concentrated exposure of the development bottlenecks of traditional established public chains. Rigid governance, unbalanced incentives, lagging technological iteration, and weakened competitive advantages are common problems for all mature public chains. Ethereum's darkest hour is not only a turning point in its own development, but also marks the official start of a revaluation of the entire public blockchain sector. In the future, if the Ethereum Foundation cannot quickly repair the team's shortcomings, optimize its governance system, and restart technological iterations, its position as the world's leading smart contract public blockchain will continue to weaken, and its market share may be continuously eroded by emerging high-performance public blockchains.</span></span></p></div></div></div>

ETHE

COIN

<p>In May 2026, Ethereum faced a significant downturn due to the mass departure of its core technical team and substantial selling by Wall Street institutions. Ethereum's price fell over 4% to $2,200, with further declines leading to over 150,000 account liquidations. Key developers left due to a centralized structure and misaligned incentives, causing a talent gap and stalling critical upgrades. Concurrently, Goldman Sachs reduced its Ethereum ETF holdings by 70%, signaling a bearish outlook, while maintaining its Bitcoin investments, highlighting a shift in market confidence.</p>

- In May 2026, Ethereum faced significant challenges, including a substantial decline in value and the departure of key technical team members, leading to market concerns about its future.  
- Wall Street institutions, notably Goldman Sachs, heavily reduced their Ethereum holdings, indicating a shift towards more stable investments and showcasing a broader institutional withdrawal from uncertain public blockchain assets.  
- The ongoing issues within Ethereum, such as centralized governance and misaligned incentives, underscore the need for urgent reforms to maintain its leading position in the cryptocurrency market.

Core team absconds/Wall Street withdraws funds: Is the Ethereum myth over?