Ethereum has been lagging in this bullish cycle. While Bitcoin surged to achieve new all-time highs, surpassing $70,000 in March, Ethereum’s prices struggled to surpass $4,000. Once it did, it could only manage a brief retest of $4,100 before experiencing a significant decline.
In the last seven months, following its recent highs in 2024, the second most valuable cryptocurrency has fallen nearly 40%. Given its performance over the past three months, concerns are mounting that Ethereum could encounter further losses. This scenario seems likely if it can’t break through the $3,000 mark in the upcoming sessions.
Don’t Hold Ethereum or Its Leaders Responsible for ETH’s Poor Performance
An analyst on X believes that ETH is underperforming compared to Bitcoin, Solana, and even Tron, not due to its network design or leadership. He argues that the disappointing performance over the last seven months is primarily tied to “uninformed” investors.
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Indeed, after its peak in March, Vitalik Buterin and the Ethereum Foundation have been selling off portions of their holdings. Dune analytics shows that the foundation has been regularly transferring coins.
On September 6, they moved 1,000 ETH when the coin was priced at $2,300. The majority of these coins were transferred to exchanges for liquidation. Although Buterin occasionally sells ETH, he has been actively offloading meme coins and donating to charities worldwide.
Typically, when a leading executive or foundation sells, it is viewed as bearish. However, aligning with the analyst’s perspective, their actions, along with several others focusing on network enhancements, shouldn’t be of significant concern.
Will ETH Emerge as a Superior Store of Value Compared to Bitcoin?
The analyst on X maintains that Ethereum’s decline is attributed to a lack of understanding among investors regarding the project’s core strengths. Importantly, he argues that ETH could potentially serve as a better store of value than gold. Furthermore, he asserts that Ethereum and Bitcoin are indeed in competition, and believing otherwise is erroneous. Both networks aspire to dominate the market ultimately.
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Currently, Bitcoin remains the most valuable cryptocurrency. Conversely, Ethereum is recognized as the most active smart contracts platform, providing greater versatility and holding a more complex value proposition than Bitcoin.
For Ethereum to gain strength, it must prove itself as a superior store of value when compared to Bitcoin. This will involve establishing strong supply dynamics and focusing primarily on financial applications. Once achieved, ETH will become more attractive not only to investors but also to developers.
Currently, Ethereum is exhibiting growth, particularly with the net deflation of ETH since EIP-1559, as observed on UltraSound Money. Additionally, its roll-up ecosystem is thriving, improving the scalability of the mainnet. Overall, this trend could favor long-term valuation increases for the coin.
Feature image from DALLE, chart from TradingView
