Ethereum at a crossroads: go, or hold on?
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This time, we don’t talk about feelings, but only about judgment: Is ETH still worth holding? What are the bulls and bears betting on?
ETH/BTC hit a five-year low, the old ecosystem left, and the new narrative did not come - Ethereum was trapped in the middle of technology upgrade and value dilution.
E guards are still talking about ideals, but reality is clearing faith.
This time, we don’t talk about feelings, but only about judgment: Is ETH still worth holding? What are the bulls and bears betting on?
1. Bullish camp: stable moat + technical dividends + macro benefits
Although the price of Ethereum has not taken off, the bulls believe that the long-term value of ETH is still gradually accumulating. The ecological fundamentals are stable, the technological upgrade is advancing, and the macro expectations are gradually improving, providing it with triple support.
1. Ethereum is still the absolute center of underlying infrastructure: Bitwise CIO pointed out that ETH is the dominant force in the three major trends of stablecoins, tokenization and AI Agents. As long as Ethereum can achieve a better user experience through Layer 2 without losing its original position in the minds of institutions, the prospect is very optimistic and tends to be bullish. Saul Rejwan, the executive partner of Masterkey, judged that once the policy is relaxed, ETH will be the first beneficiary of DeFi and DePIN. 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 reduction attracts more users to return, and also strengthens the rigid demand for ETH use. Bulls believe that the market has not yet priced these structural optimizations. It is also believed that the prototype of the "Ethereum Super Chain" has emerged, which is expected to open up new growth space.
3. Ecological structural adjustment signal: It is believed that Ethereum is shifting from a technology-oriented development path to a capital- and ecology-led development path. Pectra upgrades to adjust 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 bias is bullish.
4. Secondary traders shout "ETH is undervalued": well-known crypto analysts and well-known traders, former CEO of BitMEX have successively published articles, pointing out that ETH is undervalued by the market. Hayes even predicted: ETH will lead SOL to $5,000. Although this kind of view is radical, it reflects that mainstream traders are re-examining the valuation space of ETH.
5. Macro liquidity driving impact: It is believed 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. It's not that ETH is not good, the entire market has not entered the "water release cycle".
6. Potential opportunities for bull market rotation: ETH has not risen, not because there is no opportunity, but because the rotation has not yet reached it. 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 on-chain funds are still heavily invested in ETH: Ethereum's current TVL is US$49.85 billion, accounting for more than half of the entire DeFi network. Although Solana and Tron have performed well, ETH is still the most stable pool in terms of "saving money on the chain".
8. Lower inflation rate, supply model is better than BTC: ETH's annual issuance is only 0.5%, far lower than BTC's 0.83% (66% faster than ETH). This view emphasizes that Ethereum's inflation rate is much lower than Bitcoin, and its currency model is more sustainable.
9. Leading developer ecosystem scale: Venture capital firm Electric Capital released an annual report stating that ETH has 65% of the world's 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 sedimentation pool of Web3 and is paving the way for the next decade. Short-term prices are not the core.
2. Bearish camp: Faith decline + value capture failure + route dispute
The core view of the bears is that the times have changed, ETH lags behind competitors in terms of growth, structure, efficiency and narrative, the technical route has not been converted into token value, and the ecosystem is also facing division.
1. From the perspective of institutions, ETH may not have fallen to the right place: It is believed that the fundamentals of Ethereum have failed, and the only positive factor at present is ETF pledge, 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 place. Overall, it tends to be bearish.
2. ETH ecosystem has lost its growth engine: It is believed that the Ethereum ecosystem will be completely silent in Q1 2025, the on-chain data will decline severely, the traditional sectors (DeFi, L2, NFT) will almost stagnate, and the new hot spots (AI, Meme) will have nothing to do with ETH. The ETF pledge benefits that were once highly expected 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, and Ethereum may not be the optimal solution: questioning Ethereum's actual ability in the RWA track. Although ETH has long been regarded as the "safety bearing layer" of RWA assets, its weak currency price and the liquidation risks caused by the PoS mechanism are weakening its credibility as the bottom layer of RWA. Overall, it is believed that Ethereum's ability to carry global-level RWA is questionable, and the supporting role of the RWA narrative is overestimated, which tends to be bearish.
4. On-chain growth slows: In a commentary in December 2024, the researcher 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 ETH's expected destruction rate to drop significantly, resulting in an increase in its supply of 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. The ETH/BTC ratio broke a 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 has become the "least rising mainstream currency", with funds gradually flowing out and faith shaken.
7. With the rise of new public chains such as Solana, ETH competition has intensified: Solana has a lighter user experience and a more lively cultural atmosphere, attracting a large number of incremental users and developers. Base, Sui and other chains are growing actively, and the ETH main network has gradually become a stronghold for institutions and traditional projects, losing the appeal of young projects.
8. Questions about the technical route, whether it is empowerment or weakening value: Investor John Pfeffer said that the technical route currently promoted by Ethereum is good for users and bad for the value of tokens. Layer2 expansion and PoS transformation will reduce main chain congestion and handling 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 handling fees each year, and will also lose an important source of burning, and the risk of ecological siphoning will increase.
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 low governance efficiency and slow expansion has made the community lose confidence in future development.
11. The community route is obviously different: Jesse Pollak, head of Base, and Dankrad Feist, core developer, have fundamental differences in the degree of dependence on the main network and L2, the route is unclear, and the execution efficiency is reduced. Although Vitalik spoke out, the overall sense of direction is insufficient and the strategy is swaying.
In short, the core logic of the bears is that Ethereum is in a dilemma of technological advancement and price lag, while the ecological focus, narrative power, and user growth are quietly slipping away.
3. So, what kind of judgment should be made 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 the continuously evolving technical route, and the developers, funds and structural narratives have not collapsed, 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 medium- and short-term profits and have high risk aversion
It may be more in line with the strategy to moderately reduce ETH positions at this moment. After all, the above-mentioned many positive factors 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 positions, retaining the bottom position and flexibly adjusting your positions, and then increase your bets after the ETH trend is clear, or you can moderately operate in the band to improve capital efficiency. Neutral strategies can consider retaining a portion of the bottom position (to prevent missing potential outbreaks), while using another portion of 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 route
Moderate caution is also a wise choice. You can consider closing most of your positions in batches during 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 new narratives emerge, adjust your positions in a timely manner.
