Ethereum

A programmable blockchain

Ethereum (ETH) is the most significant blockchain after Bitcoin and at the same time fundamentally different in design: instead of pure payment logic, it offers a fully fledged programming environment for decentralised applications. The protocol was conceived in late 2013 by the then-19-year-old Vitalik Buterin; the live network launched on 30 July 2015.

The core innovation is the smart contract: self-executing programs running on the Ethereum Virtual Machine (EVM) that can encode the logic of financial products, NFTs or decentralised organisations. That makes Ethereum the technical foundation for virtually the entire ecosystem of DeFi (Aave, Uniswap, Compound), stablecoins (USDC, DAI) and NFT marketplaces.

From proof of work to proof of stake

Until September 2022 Ethereum used proof of work, like Bitcoin. With the "Merge" on 15 September 2022, the network completed one of the most complex technical migrations in crypto history, switching to proof of stake. The consequences were far-reaching: energy consumption fell by more than 99.9%, and ETH holders have since been able to earn yield through staking — typically 3% to 5% per year.

The subsequent Shanghai/Capella upgrade (April 2023, enabling withdrawals) and Dencun (March 2024, drastically reducing fees for layer-2 solutions) have improved scalability further. Planned for 2026 is the Pectra upgrade, which is mainly intended to simplify validator operations and integrate account abstraction natively.

Tokenomics and market position

Unlike Bitcoin, Ethereum has no absolute supply cap. However, the EIP-1559 upgrade in August 2021 introduced a mechanism that permanently destroys ("burns") part of every transaction fee. During periods of heavy network activity this produces deflationary net issuance — ETH effectively becomes scarcer. By mid-2026 about 120 million ETH are in circulation.

Market capitalisation in June 2026: around €400 billion at a price of roughly €3,300 per ETH — second among all cryptocurrencies.

Tax treatment in Austria

Since the 2022 crypto tax reform, ETH falls under the same regime as Bitcoin: realised capital gains and staking rewards are taxed at 27.5% KESt. Bitpanda and selected Austrian CASPs withhold and remit the tax automatically. An important point: spending ETH on gas for DEX transactions counts in principle as a disposal — a substantial source of complexity for active DeFi users.

Layer-2 ecosystem

A decisive development of recent years is layer-2 networks such as Arbitrum, Optimism, Base and zkSync, which bundle transactions off-chain and only anchor the result on Ethereum. They cut gas fees to a fraction of mainnet costs and are now the dominant venue for DeFi transactions.

What investors often ask

Are ETH spot ETFs tradable in Europe? Yes — ETH ETPs (from 21Shares or VanEck, for instance) have been available on the Vienna and Frankfurt exchanges since 2017. In the United States, spot ETFs were approved in July 2024.