Ethereum still possesses a significant first-mover advantage in the decentralized space; however, whether it can maintain its core value remains to be seen as it seeks to find a new balance between L2 development and other narrative trends. This article is sourced from a long tweet by BTC_chopsticks and compiled, translated, and written by PANews.
(Background context: What has led to Ethereum (ETH) losing its vitality?)
Table of Contents
1. The gap between expectations and reality
2. The failure of ETH ETF
3. The “unexpected” effects of upgrades
4. Vitalik’s ETH sell-off raises concerns
5. Absence in emerging trends
6. The future value fate of ETH
Personal Outlook
Conclusion:
Ethereum was once regarded as the “blue-chip asset” of the crypto market, with widespread belief that its price would reach new highs in the future, possibly even exceeding $10,000.
However, since 2022, ETH’s performance has remained sluggish. Does this indicate that Vitalik and Ethereum’s future face challenges? Let us delve into the underlying reasons together.
Over the past two years, significant upgrades to Ethereum have fueled expectations for its future, particularly the “deflationary” effect on ETH supply. However, the actual market performance has been surprising. Despite a series of scalability and upgrade efforts, ETH’s market performance has been relatively poor, even significantly surpassed by BTC and other tokens like Solana.
Many anticipated that the launch of ETH ETFs would drive up ETH prices, but the results were disappointing. Unlike the rally seen during the launch of the Bitcoin ETF, the listing of ETH ETFs led to capital outflows, partly due to the selling pressure from Grayscale’s legacy products.
The Ethereum Merge and EIP-1559 have indeed successfully reduced ETH issuance, but the recent Dencun upgrade, while lowering the costs of writing data to the main chain, indirectly reduced ETH’s revenue sources, unexpectedly diminishing the token’s appreciation potential.
Ethereum founder Vitalik recently sold a portion of his ETH to support development. Although the amount sold was relatively small, it generated negative sentiment in the market. Some investors believe this may hint at Vitalik’s lack of confidence in ETH, even though he has repeatedly stated that the price of ETH is not a priority for him. Currently, many emerging trends in the market—such as AI, RWA (Real World Assets), and memecoins—have largely not chosen Ethereum as their primary platform. Many new AI projects (like Fetch and TAO) and RWA projects have opted for more suitable independent networks and underlying architectures, while in the memecoin sector, Solana’s performance is clearly more impressive. This suggests that although Ethereum has opened the door to decentralization, other networks are becoming the dominant players in the latest narratives.
ETH remains a cornerstone of the decentralized finance (DeFi) ecosystem, accounting for over 55% of the total locked value. However, as L2 expansion solutions become mainstream, Ethereum may face the dilemma of “ecological prosperity but token value not realized” in the future, similar to the $ATOM coin within the Cosmos ecosystem.
Although I once firmly believed ETH would reach $10,000, I have become more cautious about this target. ETH still occupies 30% of my investment portfolio, but in the next bull market, I may gradually sell off some assets while holding the remainder to observe its long-term performance.
ETH’s network utility and ecological status remain solid, yet recent performance has raised concerns in the market. Despite ETH still being a leader in the industry, failure to align with emerging trends may gradually lead to a loss of some dominance in the future. Ethereum still holds an important first-mover advantage in the decentralized space; however, whether it can maintain its core value will depend on finding a new balance between L2 development and other narrative trends.
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