Author: Duo Nine , Crypto Analyst
Compiled by: Felix, PANews
Currently, there are four views that are gaining popularity in the crypto space:
- Ethereum is dying
- Institutional investors FOMO on Bitcoin
- XRP reaches settlement with SEC
- Blast becomes a slow Rug chain
Let’s analyze them one by one below.
When both Bitcoin and Solana are outperforming Ethereum, you have to wonder.
Ethereum is now suffering from the XLM "curse". (Note: Stellar completed the mainnet upgrade in February this year, and Protocol 20 and smart contracts were launched on the mainnet, but the transaction volume and XLM price performance of the network after the upgrade were not satisfactory)
If your network is fast and cheap, there is no reason for your token to be pumped up.
Did you know that transaction costs on ETH L2s like Arbitrum are now 100x lower than they were last year?
This is not good for the price of ETH.
Remember ultrasound money?
(Note: A meme related to Ethereum that is used to highlight its potential to become deflationary in the long term. The basic concept is that if the supply of gold or Bitcoin is capped and is considered "Sound Money", then the supply of Ethereum is decreasing and should be considered "Ultrasound Money")
The demand for ETH is so low right now that they have to print tokens out of thin air again.
To cover costs, ETH inflation is now positive as transaction fees no longer cut costs. This undoubtedly also increases sell-side pressure.
Why does this happen?
Because Vitalik decided to scale ETH through L2 and make it very cheap. But there is a problem.
“ETH is like oil, and now everyone is jumping into electric cars.”
So what’s the point of Ethereum?
As a network it will perform well and thrive, but if ETH is no longer used as a gas token the price will plummet.
Who wants to pay $10 more for an ETH transaction?
Token correlation will decrease and so will their price. But the Solana network is also cheap and fast, so why is it behaving so differently?
Solana isn’t cheap, and it costs billions of dollars in subsidies each year to pay for that speed.
Just like ETH prints new tokens out of thin air, Solana prints billions out of thin air. SOL may also be overwhelmed one day.
At least ETH is forthright in this regard.
Competition from Solana and tens of thousands of other Altcoin are making life harder for ETH every year.
If you reduce fees 100x, you also need to increase market demand 100x. But if demand shifts elsewhere, the downward pressure on ETH prices will intensify.
This makes one wonder, is L2s a mistake?
Compared to ETH, Bitcoin is the hottest crypto narrative.
Bitcoin prices plunged on Monday, but institutional buyers bought in due to FOMO, reaching levels not seen this year.
When will retail investors FOMO in this cycle?
Data shows that institutional investors have already entered the market. Once retail investors join in, the price will reach its peak.
Maybe later this year or early 2025. The exact timing may vary depending on price action, but it’s coming.
Some expect price action to be like a hockey stick.
Only when retail investors develop strong momentum can they succeed.
XRP reached a settlement with the SEC, and its price surged 30% after the news came out. In addition, the US SEC lost the case in July, and the court stated that cryptocurrencies are not securities.
Will there be a new bull run in the future? If so, make sure you sell when it comes.
Earlier this year, the market was flooded with information about this new L2 network called Blast.
Blast promised a lot but delivered little. Those who locked their funds in its ecosystem have lost a lot, and some have already left.
Blast is the “perfect network” for scams. After multiple hacks and millions of dollars in losses, the Blast ecosystem TVL collapsed.
The TVL that used to be worth billions of dollars is now only $800 million. The TVL of some Blast-based protocols has fallen to single digits.
But not everything is bad.
Blast is still ranked 7th, but it is the fastest losing TVL. The second fastest losing TVL chain in this graph is… Ethereum.
Pay attention to market trends because things are changing.
Related reading: Bitcoin plummeted on August 5: Should we be bullish or bearish in the future?
