Everyone knows that Ethereum is the second largest cryptocurrency on the planet. Its robust smart contracts and secure track record have made it the go-to chain for institutions, especially for things like stablecoins and tokenized RWAs. But what happens if Ethereum starts to suffer? And more worryingly, what happens to the crypto market if ETH goes to zero?
Well, a recent report analyzes exactly that, and it’s safe to say that the answer is terrifying. So today, we’ll break it down for you in simple terms, and explain just how worried you should be. Video by Coin Bureau.
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As of January 22, 2026, Ethereum (ETH) is a foundational pillar of the cryptocurrency market, supporting approximately 59% of the total market's Total Value Locked (TVL) and acting as the primary settlement layer for a $300 billion+ ecosystem. A collapse of ETH to zero would trigger a systemic failure of decentralized finance (DeFi), the suspension of billions in stablecoin liquidity, and a complete breakdown of network security infrastructure.
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Direct Market Consequences
If ETH's price hits zero, the immediate impact would be catastrophic for the broader digital asset economy:
--Infrastructure Collapse: The Ethereum network relies on validators paid in ETH to secure the system. At zero value, validators would shut down, halting block production and transaction finality.
--DeFi and Asset Paralysis: While assets like tokenized stocks, bonds, and stablecoins would still "exist" on-chain, they would become immovable and untradeable without a functioning settlement layer.
--Total Loss of Capital: With nearly 46.6% of the ETH supply currently locked in staking (worth roughly $120 billion), a move to zero would represent one of the largest destructions of wealth in financial history.
--Systemic Contagion: ETH is a "central transmitter" of systemic risk. Its failure would likely trigger forced liquidations and massive sell-offs in correlated assets like Chainlink (LINK), Uniswap (UNI), and Layer-2 scaling solutions.
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