Key Points
- Ethereum’s leadership has divergent views on the future and value of ETH, causing mixed market sentiment.
- ETH’s value has dropped 44% compared to Bitcoin in the past two years.
The leadership of Ethereum (ETH) has been in the news due to differing views on the cryptocurrency’s long-term roadmap and value.
Ethereum’s Value Compared to Major Companies
Justin Drake, a member of the Ethereum community, suggested that ETH could attract multi-trillion valuations based on its fees, akin to companies like Nvidia and Apple.
However, this view was not shared by all in the Ethereum community. Sam Kazemian, Founder of DeFi protocol Frax Finance, argued that comparing ETH to Nvidia or Apple could limit its growth potential, particularly in comparison to Bitcoin (BTC).
Kazemian further stated that this approach to valuing ETH was flawed and could prevent it from competing with BTC. He argued that ETH’s primary value should be based on its ‘store of value’ (SoV) and DeFi ecosystem.
ETH’s Market Position
Unlike BTC’s “digital gold” tagline, ETH has struggled to find a unified pitch for potential investors. The push for “programmable money” and “digital oil” has not gained the expected traction.
The vision for Ethereum’s DeFi has also seen differing views among leaders. For instance, Vitalik Buterin has expressed skepticism about pure DeFi being the only growth catalyst for crypto. This contrasts with others like Kazemian and Uniswap’s Hayden Adams, who believe DeFi is crucial for ETH’s value growth.
According to analysts from Coinbase, these divergent visions have made it difficult for new investors to understand the asset, negatively impacting its market sentiment.
Moreover, ETH’s fees have significantly decreased since the Dencun upgrade in March. This has led to debates within the community on whether to adjust blob fees to help ETH L1 gain value from L2s, especially as ETH’s inflation issue worsens post-Dencun upgrade.
These community issues have further affected investor sentiment around ETH. As a result, ETH has lost ground to BTC, with its value dropping 44% compared to BTC in the past two years.
