Bitwise Chief Information Officer Matt Hougan wrote an article "Betting Against the Trend of Ethereum", saying that everyone is now bearish on Ethereum. It seems that it is fashionable to hate Ethereum now, but after a while everyone will feel stupid.

(Ethereum developers talk about development difficulties and reveal that Ethereum is off track)

ETH/BTC exchange rate returns to 2021 lows

The ETH/BTC exchange rate recently hit a three-year low, returning to April 2021 levels, and its year-to-date gains have been completely outpaced by its main competitor Solana:

  • BTC：38%

  • SUN：31%

  • ETH：3.23%

Matt Hougan pointed out that the atmosphere in the Ethereum community is also quite sluggish.

ETH/BTC weekly chart No one likes Ethereum right now

Matt Hougan lists several reasons for Ethereum’s downturn:

electoral risk

Ethereum faces real risks in the U.S. presidential election.

While Bitcoin is largely unregulated, with even SEC Chairman Gary Gensler admitting that it is not a security, Ethereum is not. The SEC seems to consider pledged ETH to be a security and has serious concerns about the DeFi ecosystem driven by Ethereum.

Ethereum may face challenges if Harris wins the election and continues Biden's hostility to cryptocurrencies.

Solana and other public chains compete

Ethereum faces fierce competition from emerging public chains with high throughput and low cost. Solana is the main challenger, and other existing and upcoming public chains are also beginning to put pressure.

In the crypto field, there is a concept of speculating on the new and not on the old. Due to Ethereum’s older and higher-cost technology, “optimistic on Solana and other new public chains and bearish on Ethereum” has become the mainstream idea.

Challenging token economy

Ethereum has been aggressively scaling L2 transaction volume over the past few years over core L1, which has been a huge success, with L2 activity like Base, Arbitrum, and Optimism skyrocketing.

However, the rise of L2 has caused Ethereum's revenue to fall to a four-year low, and many people also doubt whether the development of L2 is a waste of time.

(The Dilemma and Future Development of Ethereum Layer 2: Data Analysis Reveals Successes and Challenges)

ETF performance sluggish

The Ethereum spot ETF hasn’t had the overwhelming success of the Bitcoin ETF, and while the ETF raised billions of dollars, that was offset by $2.7 billion in outflows from Grayscale ETHE.

(The grayscale ETHE unlocking is about to end, and the Ethereum ETF is expected to usher in the dawn)

Ethereum dominates most large crypto applications

Matt Hougan thinks the above are all good reasons to worry about Ethereum, but he also feels it misses the broader point.

Public chains such as Ethereum and Solana are trying to create a "public computer", a global database that can be used by everyone, and can be used to develop applications. But when you look at which applications are achieving breakout success, you’ll find that they are almost all dominated by Ethereum:

  • Stablecoins: More than half of all stablecoins are issued on Ethereum.

  • DeFi: Over 60% of all DeFi assets are locked on Ethereum.

  • Polymarket: Breakthrough prediction market finally lands on Ethereum.

There are many more examples.

Matt Hougan points out:

When BlackRock wanted to build a tokenized money market fund this year, it chose Ethereum; the fund currently manages more than $500 million in assets. When Nike launched its Web3 creation platform called .Swoosh, it chose Ethereum. When the next big traditional company wants to do a blockchain product, I bet they will choose Ethereum too.

(Nike Web3 creation platform ".SWOOSH" is open for membership! The first virtual product will be launched)

Microsoft of Blockchain

Matt Hougan continues to list the benefits of Ethereum:

  • Market capitalization 5 times greater than major competitors

  • Have the most active developers and the most active users

  • The only programmable blockchain with minimal regulatory support in the United States

  • With a thriving regulated futures market and a multi-billion dollar ETF market

He concluded:

Ethereum is like the Microsoft of the blockchain world. Everyone wants to talk about Google, Slack, and Zoom, arguing that these apps have brought revolutionary technology, but Microsoft is still bigger than these companies. This does not mean that I am not optimistic about Solana or other public chains. They are having a significant impact and have many benefits, but I think people are too quick to ignore the real-world success of Ethereum and its ecosystem. In my opinion, Ethereum's challenges are minimal and its opportunities are emerging. The market will re-evaluate Ethereum as the election approaches or any regulatory clarity emerges, so it looks more like a potential contrarian bet at the end of the year.

This article Bitwise: It seems fashionable to hate Ethereum now, but you will regret it eventually appeared first on Chain News ABMedia.

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