On September 13, an analyst at Coinbase said that in addition to the decline in network activity and token inflation, Ethereum’s recent underperformance relative to its peers may also be related to broader market factors after the deleveraging event in early August.
“Ethereum network activity and supply inflation are important factors in its underperformance, but we also believe current market structure has impacted price action,” David Duong, global head of research at Coinbase, said in a report. Many cryptocurrency investors are focusing on Altcoin and other positions that are difficult to exit, potentially trapping funds that could have flowed to networks in the broader crypto ecosystem, such as Ethereum.
“Currently, crypto native investors dominate the market, and this group is likely concentrated in Altcoin and other crypto positions that are more difficult to exit. We believe that Ethereum needs a new catalyst to reignite developer and investor enthusiasm in order to catch up,” he added.
Duong also said that due to the lack of new narratives and limited capital supply, the market is paying more and more attention to the comparison between Ethereum and other smart contract platforms. "In fact, we believe that many traditional players still fail to better understand Ethereum's supply plan and smart contract utility,"
