Author: Fairy, ChainCatcher
With each cycle of bull and bear markets, a new batch of curious faces will emerge. In their eyes, Ethereum is often an important threshold for entering the crypto world - technologically advanced, with a mature ecosystem, and a stable industry position.
But is the reality really that good?
On one side, there is the trust that newcomers have in Ethereum, and on the other, the ruthless indifference of the market. After communicating with several university students majoring in blockchain, we found that there may be a certain disconnect between their expectations and the current state of ETH.
Are these hopeful newcomers the future builders, or ultimately the transient victims eliminated by the market?
Ethereum from the Perspective of Newbies: Trust, Technology, and Understanding
Rabbit
A freshman student majoring in blockchain, a complete beginner who has not yet engaged in cryptocurrency or contract trading.
Rabbit currently has not entered the market, as he believes his knowledge reserve is insufficient and he does not dare to invest rashly. However, when it comes to Ethereum, he expresses a natural sense of trust, believing it is a top project and relatively authoritative.
When asked if he will consider purchasing ETH in the future, he said he will, because compared to other cryptocurrencies, he believes the risk of ETH is relatively smaller.
Lucien
A senior student majoring in blockchain engineering, mainly focusing on smart contract development and the technical aspect, with less understanding of the market. ETH accounts for 20% of his cryptocurrency spot investment. Overall, he is optimistic about Ethereum.
Lucien stated that from his understanding, Ethereum's technology is developing, and Ethereum's development is driving the industry's development. For example, the recent Ethereum upgrade has significantly reduced gas fees on the chain, lowering the interaction cost for users. The improvement plan of the Cancun upgrade is also more developer-friendly, with the new opcode in EIP1153 becoming an important component of Uniswap V4.
However, he also pointed out that Ethereum's framework is relatively mature, and the current improvements are mainly optimizations, so the growth rate is relatively limited.
Vernon
Graduated from a blockchain engineering program for nearly a year, focusing on meme coins and contract trading, with a preference for short-term operations.
Among all crypto assets, ETH is the only large-cap cryptocurrency that Vernon invests in, mainly for wealth management and risk diversification. When discussing the reasons for choosing ETH, he stated that the price of ETH had a large decline when he bought it, and as the current cycle has not yet broken through the historical high, he believed there was still room for upside.
Regarding ETH's sluggish performance in this cycle, he expressed understanding and held a similar view to Lucien - Ethereum's challenge lies in its limited innovation. Nowadays, Ethereum finds it difficult to undergo major reforms, and its pace of innovation has become cautious and fragmented.
The three newcomers in this exchange, though with different perspectives, all have a positive sentiment towards Ethereum and recognize its value. In other words, Ethereum's "public relations" in the newbie circle remains strong, like the "approachable big brother" in the crypto world. However, the ideal may be more beautiful than the reality, and Ethereum's current situation may not be as optimistic as the newcomers perceive.
The Reality of Ethereum: How Long Can the Faith Last?
Weakening New Demand for ETH
Crypto KOL Murphy published an article revealing the current state of investors based on ETH data: high-position investors are adding positions, but new demand for ETH is weakening. After ETH fell below $2,000, there was almost no new buying power.
The recent cost basis distribution (CBD) of ETH shows two main holding groups:
High-position accumulation group ($3,200-$3,500): These investors did not sell during the ETH dip to $1,900, and continued to accumulate, showing strong faith and holding willingness.
Mid-position reduction group ($2,600-$2,800): This part of the holders gradually reduced their positions after ETH fell below $2,300, with only a portion of their holdings still held.
CBD data of ETH in the past 3 months
The Controversy of ETH "Deflation Failure"
Hu Yilin, a doctoral student from Peking University, wrote that the so-called "deflation" of ETH is essentially a failed design. Under the PoS mechanism, even if the total supply of ETH is decreasing, it does not mean a fair or healthy development.
He pointed out that Ethereum's economic model has structural inequality - stakers are always the "inflating" party, while frequent traders bear the "deflationary" cost. The rich, vested interests, and old money always sit comfortably in the profit zone, and the more active the network transactions, the more Gas fees are burned, the more ETH is deflationary, and they are the beneficiaries. For newcomers, small investors, and bottom-level traders, the more frequent the transactions, the heavier the Gas fee burden, and they are further squeezed by the deflationary mechanism.
Hu Yilin incisively summarized: In the ETH system, the old money not only can zero-risk outperform inflation, but also enjoy interest; even under the deflationary mechanism, the "faucet" above the old money's head not only has not been turned off, but has become even more powerful.
Whales Exiting Frequently
According to data shared by on-chain analyst Ali, whales have sold nearly 130,000 ETH in the past week.
On March 13, the whale address ..eCa41 cleared its position and sold 6,401 ETH bought in December 2023, incurring a loss of $1.974 million.
On March 14, an ETH whale recharged 16,467 ETH to HTX after holding for 25 years, potentially making a profit of $13.1 million.
On March 17, a wallet that had been dormant for 3 years sold all of its 67 ETH (worth $192,000), making only $126,000 in profit.
...
Don't Let Faith Become a Massacre
The world is full of people pursuing their own interests.
Ethereum's years of accumulated brand, technology, and ecosystem have shaped the trust that newcomers have in it, making them willing to take root, learn, try, and explore here.
But the market is ruthless...
Ethereum, don't let them ultimately only learn one thing - "to run fast".
