The Ethereum (ETH) worth has crossed the $3,000 threshold for the primary time since April 2022 yesterday. Nevertheless, amidst the celebratory fireworks within the crypto neighborhood, Fred Krueger, a famend Bitcoin ETF skilled, has voiced a starkly contrasting opinion. Krueger, a Wall Avenue veteran and prop dealer, took to X (previously Twitter) to precise his skepticism concerning the present valuation of ETH, stating, “ETH is totally indifferent from actuality.”
Why Ethereum Is “Fully Indifferent From Actuality”
Krueger’s feedback come at a time when the crypto market is witnessing a resurgence in investor curiosity, with Ethereum on the forefront attributable to its latest worth rally. Regardless of this, Krueger factors out a regarding development within the utilization of the Ethereum blockchain.
ETH is totally indifferent from actuality. A deep dive.———————————————————
ETH is at $3,000. Absolutely 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. Absolutely this should imply {that a} ton of persons are utilizing ETH, proper? Nope. Eth, the chain has dropped from 120K energetic each day customers in 2021, to only 66K during the last yr. The highest app, Uniswap V3 is simply getting 16K DAUs. I bear in mind, again in 2020 this quantity was 60K or extra,” 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 cash like Shiba Inu attributable to its inflated market cap, which stands at $361 billion regardless of the autumn in energetic customers. “It actually has turn into a sort of meme coin, just like Shiba Inu,” Krueger remarked, pointing to the stark distinction between Ethereum’s excessive market cap and its diminishing direct use.
Krueger argues that Ethereum shouldn’t be solely overvalued but additionally faces stiff competitors from different blockchains that outperform it by way of transaction prices and velocity. “It’s not significantly low cost ($1.50 per transaction), or quick. In case you are simply concerned with reward factors for video games, or casino-style DeFi apps — Solana, Avalanche, Close to and so on.. 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). “Lastly, I don’t assume Gensler goes to permit an ETH ETF… I simply don’t assume Gary needs to make his second ETF an enormous pre-mine. Units a really dangerous precedent,” he said, reflecting on the challenges Ethereum faces in gaining mainstream monetary acceptance.
The Crypto Group Reacts
In response to Krueger’s essential take, the crypto neighborhood on X offered blended reactions. One person challenged Krueger’s evaluation by pointing to Ethereum’s rollup-centric roadmap and the deceptive nature of utilizing mainnet each day energetic 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 final 12 months. This isn’t the case that each one is effectively in ETH-land.”
One other person tried to spotlight the cyclical nature of DeFi and the broader crypto market, suggesting that the present downturn is a brief part of threat aversion. But, 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’m not concerned with degen ape video games. Have enjoyable,” he said.
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 turn into vital 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 total stance on Ethereum and the broader crypto market is evident. “My place on ETH. On the finish of the day, Bitcoin is the revolution… Each different cryptocurrency is preventing for another a lot smaller use case,” he defined, underscoring his perception in Bitcoin’s distinctive worth proposition as a decentralized, finite foreign money system.
At press time, the ETH worth surpassed the 0.5 Fibonacci retracement degree (at $2,922), buying and selling at $2,935. A weekly shut above this threshold may verify one other leg up for the ETH worth.
Featured picture created with DALL·E, chart from TradingView.com
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