The Ethereum (ETH) value has crossed the $3,000 threshold for the primary time since April 2022 yesterday. However, amidst the celebratory fireworks within the crypto neighborhood, Fred Krueger, a famend Bitcoin ETF skilled, has voiced a starkly contrasting opinion. Krueger, a Wall Street veteran and prop dealer, took to X (previously Twitter) to specific his skepticism concerning the present valuation of ETH, stating, “ETH is completely detached from reality.”
Why Ethereum Is “Completely Detached From Reality”
Krueger’s feedback come at a time when the crypto market is witnessing a resurgence in investor curiosity, with Ethereum on the forefront on account of its latest value rally. Despite this, Krueger factors out a regarding pattern within the utilization of the Ethereum blockchain.
ETH is totally indifferent from actuality. A deep dive.
———————————————————ETH is at $3,000. Surely this should imply {that a} ton of persons are utilizing ETH, and that this quantity is simply going up, proper?
Nope.
Eth, the chain has dropped from 120K… pic.twitter.com/141GwtB0yz
— Fred Krueger (@dotkrueger) February 21, 2024
“ETH is at $3,000. Surely this must mean that a ton of people are using ETH, right? Nope. Eth, the chain has dropped from 120K active daily users in 2021, to just 66K over the last year. The top app, Uniswap V3 is only getting 16K DAUs. I remember, back in 2020 this number was 60K or more,” he famous, emphasizing a decline within the platform’s direct utility and engagement.
The Bitcoin ETF skilled additional criticized the valuation of Ethereum, drawing parallels to meme coins like Shiba Inu on account of its inflated market cap, which stands at $361 billion regardless of the autumn in lively customers. “It really has become a type of meme coin, similar to Shiba Inu,” Krueger remarked, pointing to the stark distinction between Ethereum’s excessive market cap and its diminishing direct use.
Krueger argues that Ethereum just isn’t solely overvalued but in addition faces stiff competitors from different blockchains that outperform it by way of transaction prices and pace. “It’s not particularly cheap ($1.50 per transaction), or fast. If you are just interested in reward points for games, or casino-style DeFi apps — Solana, Avalanche, Near etc.. all crush it.”
Krueger additionally expressed skepticism concerning the future regulatory panorama for Ethereum, significantly in regards to the potential for an ETH exchange-traded fund (ETF). “Finally, I don’t think Gensler is going to allow an ETH ETF… I just don’t think Gary wants to make his second ETF a massive pre-mine. Sets a very bad precedent,” he acknowledged, reflecting on the challenges Ethereum faces in gaining mainstream monetary acceptance.
The Crypto Community Reacts
In response to Krueger’s vital take, the crypto neighborhood on X offered combined reactions. One consumer challenged Krueger’s evaluation by pointing to Ethereum’s rollup-centric roadmap and the deceptive nature of utilizing mainnet every day lively customers (DAU) as a metric for the platform’s well being. Krueger, nevertheless, remained unconvinced, stating, “Even L2s like Arbitrum have been in decline for the last 12 months. This is not the case that all is well in ETH-land.”
Another consumer tried to focus on the cyclical nature of DeFi and the broader crypto market, suggesting that the present downturn is a brief section of threat aversion. Yet, Krueger dismissed these arguments, reiterating his lack of curiosity in speculative DeFi actions and emphasizing his perception in Bitcoin because the true revolutionary cryptocurrency. “I am not interested in degen ape games. Have fun,” he acknowledged.
Krueger’s critique extends past Ethereum to the broader panorama of cryptocurrencies, questioning the long-term viability and worth proposition of altcoins, together with Layer 1 options apart from Bitcoin. He argues that these platforms are unlikely to develop into important worth turbines in the long run, likening their management mechanisms to fiat currencies however with central figures like Vitalik Buterin rather than conventional central bankers.
Krueger’s general stance on Ethereum and the broader crypto market is obvious. “My position on ETH. At the end of the day, Bitcoin is the revolution… Every other cryptocurrency is fighting for some other much smaller use case,” he defined, underscoring his perception in Bitcoin’s distinctive worth proposition as a decentralized, finite forex system.
At press time, the ETH value surpassed the 0.5 Fibonacci retracement stage (at $2,922), buying and selling at $2,935. A weekly shut above this threshold may affirm one other leg up for the ETH value.
Featured picture created with DALL·E, chart from TradingView.com
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