Author: BTC_chopsticks
Ethereum was once considered a "blue chip asset" in the crypto market, and it was widely believed that its price would reach new highs in the future, even breaking through $10,000.
However, ETH’s performance has been sluggish since 2022. Does this indicate challenges for Vitalik and Ethereum’s future? Let’s take a deeper look at the reasons behind this.
1. The gap between expectations and reality
Over the past two years, Ethereum's major upgrades have made people look forward to its future, especially the "deflationary" effect of ETH supply. However, the actual market performance is surprising. Despite a series of expansions and upgrades, ETH's market performance is relatively poor, and it has even been significantly surpassed by BTC and other tokens (such as Solana).
2. The failure of ETH ETF
Many people expected the launch of the ETH ETF to drive up the price of ETH, but the result was a big disappointment. Unlike the rising trend when the Bitcoin ETF was launched, the ETH ETF saw capital outflows after its listing, which was partly attributed to the selling pressure of Grayscale's legacy products.
3. “Unexpected” impacts of the upgrade
The Merge and EIP-1559 did successfully reduce the issuance of ETH, but the latest Dencun upgrade, while reducing the cost of writing data to the main chain, indirectly reduced ETH's revenue source and accidentally reduced the token's appreciation potential.
4. Vitalik’s ETH sell-off raises concerns
Ethereum founder Vitalik recently sold a portion of his ETH to support development, and although the amount sold was relatively small, the market has generated negative sentiment about it. Some investors believe this may imply Vitalik’s lack of confidence in ETH, although in fact Vitalik has repeatedly stated that ETH price is not a priority for him.
5. Absence from Emerging Trends
Many emerging trends in the market, such as AI, RWA (real world assets), and memecoin, mostly do not choose Ethereum as the main platform. Many emerging AI projects (such as Fetch, TAO) and RWA projects have chosen more suitable independent networks and underlying architectures, and in the field of memecoin, Solana's performance is obviously more impressive. This means that although Ethereum has opened the door to decentralization, other networks are becoming the leaders of the latest narrative.
6. The future value of ETH
ETH is still the backbone of the decentralized finance (DeFi) ecosystem, accounting for more than 55% of the total locked value. However, with the popularization of L2 expansion solutions, Ethereum may face the dilemma of "ecological prosperity but unrealized token value" in the future, similar to the $ATOM coin in the Cosmos ecosystem.
Personal Outlook
Although I once firmly believed that the price of ETH would reach $10,000, I have become more cautious about this goal. ETH still accounts for 30% of my portfolio, but in the next bull market, I may gradually sell some assets and hold the remaining part to observe its future performance in the long term.
in conclusion:
ETH's network utility and ecological status remain solid, but its recent performance has caused a lot of market concerns. Although ETH is still the industry leader, it may gradually lose some of its dominance in the future if it fails to adapt to emerging trends. Ethereum still has an important first-mover advantage in the field of decentralization, but whether it can maintain its core value still needs to find a new balance between L2 development and other narrative waves.
