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 gateway to the crypto world - technologically advanced, ecologically mature, and with a stable industry position.
But is the reality really so good?
On the one hand, there is the newcomers' trust in Ethereum, on the other hand, the ruthless market. After communicating with several blockchain professional college students, 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 the ultimate victims eliminated by the market?
Ethereum from the Perspective of Newbies: Trust, Technology and Understanding
Rabbit
A freshman in the blockchain major, a complete novice, has not yet conducted any cryptocurrency or contract transactions.
Rabbit currently does not enter the market, because he believes that 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 that it belongs to the top project and is more authoritative.
When asked if he will consider buying ETH in the future, he said he will consider it, because compared to other currencies, he believes the risk of ETH seems smaller.
Lucien
A senior student in the blockchain engineering major, mainly focusing on smart contract development and the technical level, with little understanding of the market. ETH accounts for 20% of his cryptocurrency spot investment. Overall, he is optimistic about Ethereum.
Lucien said that from his understanding, Ethereum technology is developing, and the development of Ethereum is driving the development of the industry. For example, the recent upgrade of Ethereum has greatly reduced the gas fees on the chain, reducing the interaction cost for users. And the improvement plan of the Cancun upgrade is also more friendly to developers, such as the new opcode in EIP1153 has become an important part of Uniswap V4.
However, he also pointed out that the Ethereum framework is relatively mature, and the current improvements are mainly optimizations, so the growth rate is relatively limited.
Vernon
Graduated from the blockchain engineering major for nearly a year, focusing on meme coins and contract trading, preferring short-term operations.
Among all crypto assets, ETH is the only large-cap currency that Vernon invests in, mainly for wealth management and risk diversification. When talking about the reason for choosing ETH, he said that the price of ETH fell the most when he bought it, and the current cycle has not yet broken through the historical high, so he believed that there was still room for upside.
Regarding the sluggish performance of ETH in this cycle, he expressed understanding and held a similar view to Lucien - the challenge for Ethereum lies in the limitation of innovation. Nowadays, Ethereum finds it difficult to undergo major reforms, and the pace of innovation has become cautious and fragmented.
The three newcomers in this exchange have different perspectives, but they all have a fondness for Ethereum and recognize its value. In other words, Ethereum's "public relations" in the novice circle is still strong, like the "friendly big brother" in the crypto world. However, the ideal is rich, but the reality may not be as optimistic as they wish, and the current state of Ethereum may not be as rosy as the newcomers see it.
The Reality of Ethereum: How Long Can Faith Hold?
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 increasing their 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 when ETH fell to $1,900, and continued to accumulate, with stronger 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, and only a portion of the chips are still held.
ETH's CBD data in the past 3 months
The Controversy of "Deflation Failure" of ETH
Peking University doctoral student Hu Yilin published an article stating that the so-called "deflation" of ETH is essentially a failed design. Under the PoS mechanism, even if the total amount of ETH is decreasing, it does not mean fair or healthy development.
He pointed out that Ethereum's economic model has structural inequality - the stakers are always the "inflated" party, while the 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 deflated, 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" on the head of the old money 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, with a loss of $1.974 million.
On March 14, an ETH whale recharged 16,467 ETH to HTX after holding for 25 years, possibly making a profit of $13.1 million.
On March 17, a wallet that had been dormant for 3 years sold all 67 ETH (worth $1.92 million), making only $126,000 in profit.
...
Don't Let Faith Become a Massacre
The world is bustling, all for the sake of profit.
Ethereum's brand, technology and ecosystem accumulated over the years have shaped its sense of trust in the eyes of newcomers, 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 - "run fast".
