ETH/BTC hit a five-year low, the old ecosystem left, and the new narrative did not come - Ethereum was trapped in the middle ground between technology upgrade and value dilution.
E The guards are still talking about ideals, but reality is clearing up their beliefs.
This time, we are not talking about feelings, but judgment: Is ETH still worth holding? What are the bulls and bears betting on?
1. Bullish camp: Stable moat + technology dividend + macro benefits
Although the price of Ethereum has not taken off, bulls believe that the long-term value of ETH is still gradually accumulating. The solid ecological fundamentals, the advancement of technological upgrades, and the gradual improvement of macro expectations provide triple support for it.
1. Ethereum is still the absolute center of the underlying infrastructure: Bitwise CIO @Matt_Hougan pointed out that ETH dominates the three major trends of stablecoins, tokenization and AI Agent. As long as Ethereum can achieve a better user experience through Layer 2 without losing its original position in the hearts of institutions, the outlook is very optimistic and tends to be bullish. Masterkeys executive partner Saul Rejwan judged that once the policy is relaxed, ETH will be the first beneficiary of DeFi and DePIN. @BTW 0205 believes that although it is bearish in the short term, in the medium and long term, Ethereum still has ecological inertia and system-level advantages. As long as it can reconstruct the value model and promote the implementation of the new narrative, it is still possible to return as a king.
2. Technology upgrades continue to release structural dividends: Prague/Electra upgrades are imminent, and Rollup performance improvements will make ETH faster, cheaper, and more open. Gas reductions attract more users to return, and also strengthen the rigid demand for ETH use. Bulls believe that the market has not yet priced in these structural optimizations. @binji_x also believes that the prototype of the Ethereum Super Chain has emerged, which is expected to open up new growth space.
3. Signals of ecological structural adjustment: @feifan 7686 believes that Ethereum is shifting from a technology-oriented development path to a capital and ecological-led development path. Pectra upgrades and adjusts ETH attributes, cross-chain testing alleviates performance shortcomings, and oracle layout competes for pricing power. Behind this is a systematic self-rescue around capital structure and ecological discourse power. Although it is difficult to immediately reflect the price in the short term, the direction is clear and the overall trend is bullish.
4. Secondary traders say ETH is undervalued: Well-known crypto analyst @rovercrc and well-known trader and former BitMEX CEO @CryptoHayes have successively published articles, pointing out that ETH is undervalued by the market. Hayes even predicted that ETH will rise to $5,000 ahead of SOL. Although such views are radical, they reflect that mainstream traders are re-examining the valuation space of ETH.
5. Macro liquidity driving impact: @0x VeryBigOrange believes that no matter how many technical routes or ecological discussions there are around Ethereum, there is only one fundamental reason for the current price stagnation - macro liquidity has not yet been released. Its not that ETH is not good, but the entire market has not entered the flooding cycle.
6. Potential opportunities for bull market rotation: ETH has not risen, not because there is no opportunity, but because the rotation has not reached it yet. Combined with the expectation of interest rate cuts and the progress of ETFs, ETH has the potential to return from the edge to the center. DigitalCoinPrice estimates that in an optimistic scenario, it will reach $7,000 by the end of the year, and may reach $47,000 by 2030.
7. TVL ranks first, and funds on the chain are still heavily invested in ETH: Ethereums current TVL is 49.85 billion US dollars, accounting for more than half of the entire DeFi network. Although Solana and Tron have performed well, ETH is still the most stable pool when it comes to saving money on the chain.
8. Lower inflation rate, better supply model than BTC: ETH annual issuance is only 0.5%, much lower than BTCs 0.83% (66% faster than ETH). This view emphasizes that Ethereums inflation rate is much lower than Bitcoin, and its monetary model is more sustainable.
9. Leading developer ecosystem: According to the annual report released by venture capital firm Electric Capital, ETH has 65% of the worlds on-chain developer innovation activities, more than 6,200 active developers per month, and an annual growth rate of 67% for L2 developers. These data show that Ethereum still occupies a core position in the developer community.
10. Foundation reform enhances governance expectations: Vitalik announced the reorganization of the foundation to improve the efficiency of technical decision-making and enhance transparency. For systemic assets such as ETH, upgrading the governance structure means enhanced long-term certainty.
In summary, the bulls believe that Ethereum is the value pool of Web3 and is laying the technical foundation for the next decade. Short-term prices are not the core.
2. Bearish camp: Faith decline + value capture failure + route controversy
The core point of the bears is that times have changed, ETH lags behind its competitors in terms of growth, structure, efficiency and narrative, its technological route has failed to be converted into token value, and its ecosystem is facing division.
1. From the perspective of institutions, ETH may not have fallen to the right level yet: @jason_chen 998 believes that the fundamentals of Ethereum have failed, and the only positive factor at present is ETF staking, but core institutions such as BlackRock have not yet taken action, reflecting that they are still suppressing prices to absorb funds, indicating that ETH may not have fallen to the right level yet. The overall bias is bearish.
2. ETH ecosystem has lost its growth engine: @Loki_Zeng believes that the Ethereum ecosystem will be completely silent in Q1 2025, with severe declines in on-chain data, almost stagnant traditional sectors (DeFi, L2, NFT), and new hot spots (AI, Meme) have nothing to do with ETH. The ETF pledge benefits that were once highly anticipated are actually not attractive enough, and large funds find it difficult to accept the low-yield, high-cost configuration logic. Overall, it is believed that ETH lacks substantial growth momentum and tends to be bearish.
3. RWA narrative is disillusioned, Ethereum may not be the optimal solution: @yuyue_chris questioned Ethereums actual ability in the RWA track. Although ETH has long been regarded as the safety carrier of RWA assets, its weak price and the liquidation risk caused by the PoS mechanism are weakening its credibility as the bottom layer of RWA. Overall, it is believed that Ethereums ability to carry global-level RWA is questionable, and the RWA narratives support for it is overestimated, which is bearish.
4. On-chain growth slows down: In his December 2024 commentary, @PANewsCN researcher @wsy 2021111 mentioned that the growth of ETH mainnet users has stagnated over the past year, and a large number of new users prefer new chains such as L2 or Solana. In his view, Ethereum is transforming into a value sedimentation pool for large users, and ordinary small users and emerging popular applications prefer chains with lower fees and faster speeds. This view highlights the pressure Ethereum faces in terms of user growth.
5. Supply enters inflationary state: As network transaction fees continue to decline, the daily burn of Ethereum has fallen to a historical low. This has caused ETHs expected burn rate to drop significantly, resulting in its supply increasing by about 0.76% per year, or about 945,000 ETH per year. Today, the overall supply of Ethereum has exceeded the level before the merger.
6. ETH/BTC ratio hits five-year low: On March 31, analyst James Van Straten said that the ETH to BTC exchange rate fell to 0.02193, a five-year low. Under the BTC halving and the new L1 rotation, ETH became the least rising mainstream currency, funds gradually flowed out, and faith was shaken.
7. The rise of new public chains such as Solana intensifies the competition with ETH: Solana has a lighter user experience and a more lively cultural atmosphere, attracting a large number of incremental users and developers. Chains such as Base and Sui are growing actively, and the ETH mainnet has gradually become a stronghold for institutions and traditional projects, losing the appeal of young projects.
8. Questions about the technical route: Is it empowering or weakening value? Investor John Pfeffer said that the technical route currently promoted by Ethereum is good for users but bad for the value of tokens. Layer 2 expansion and PoS transformation will reduce main chain congestion and transaction fees. Although this improves the on-chain experience, it reduces the consumption of ETH for each transaction.
9. Outflow of core applications: At the end of 2024, the industry reported that Uniswap plans to launch an independent chain. Uniswap is the largest source of gas for ETH, accounting for more than 14%. If it moves to another chain, ETH will lose hundreds of millions of dollars in fees each year, and will also lose an important source of burning, exacerbating the risk of ecological siphoning.
10. The foundation was accused of cashing out at a high price, and the trust in governance was questioned: The Ethereum Foundation was exposed to sell at a high point at the end of 2024, triggering speculation of internal bearishness. The superposition of problems such as inefficient governance and slow expansion has caused the community to lose confidence in future development.
11. The community has obvious differences in direction : Base leader Jesse Pollak and core developer Dankrad Feist have fundamental differences on the degree of reliance on the mainnet and L2. The direction is unclear and the execution efficiency is reduced. Although Vitalik has spoken out, his overall sense of direction is insufficient and his strategy is wavering.
In short, the core logic of the bears is that Ethereum is in a dilemma where technology is advancing but prices are lagging behind, while the ecological focus, narrative power, and user growth are quietly slipping away.
3. So, what kind of judgment should we make now?
Based on the above long and short factors, we can make the following comprehensive analysis based on the mentality and decision-making of coin holders:
1. Coin holders who focus on long-term value
If you believe that ETH represents the infrastructure layer of future Crypto, has the most extensive developers, the strongest DeFi ecosystem, and a continuously evolving technology route, and that the developers, funds, and structural narratives have not collapsed, and that it is still the core carrier chain of the new narrative (DePIN, AI Agent, RWA), then it is a logical choice to hold or even increase positions in batches and wait for the next cycle.
2. Coin holders who focus on short-term and medium-term profits and have a high risk aversion
It may be more strategic to moderately reduce ETH positions at this moment. After all, the above benefits are more likely to gradually emerge in the medium and long term, while ETH may continue to fluctuate or even weaken in the short term. The competitive landscape and value dilemma mentioned in the short-selling argument are not problems that can be solved in one or two quarters.
At this time, you can consider reducing your position, retaining the base position and flexibly adjusting the position, and then increase the bet after the ETH trend is clear, or you can moderately swing trade to improve capital efficiency. A neutral strategy can consider retaining a part of the base position (to prevent missing potential outbreaks), while using another part of the funds for swing trading or allocating other assets to hedge the opportunity cost of holding ETH.
3. Coin holders who care about short-term performance and certainty, or have doubts about Ethereum’s path
It is also a wise choice to be moderately cautious. You can consider closing most of your positions in batches when the market rebounds, while continuing to pay attention to key indicators of the Ethereum ecosystem (such as on-chain activity, etc.). If there are significant signs of improvement in fundamentals in the future, or a new narrative emerges, you can adjust your positions in a timely manner.
Risk warning: The above is for information sharing only and is not investment advice.
