First, the conclusion: people are unhappy with Bitcoin at 98,000, yet retail investors are excited about Ethereum at 3,200, indicating that most retail investors do not hold Bitcoin; Ethereum's market is still too heavy, and has not washed most people off yet.
After comforting myself for so long, if Ethereum really cannot rise this time and becomes the new generation of "EOS", I can only say: if Vitalik doesn't apologize, I will hit you every time I see you.
Regarding the theory of switching Ethereum practitioners, it has sparked many discussions among staunch ETH holders and opponents, here are some additional thoughts:
1. Who is the new practitioner?
In this wave of consolidation, the old OGs of the industry (the original ICO group) have transformed into formal funds of Wall Street financial institutions, and in the future, there may even be state-level funds.
However, Teacher TVBee provided a new perspective: transitioning from PoW to PoS will definitely require a change in practitioners. The original mining pools no longer have a sustainable profit model, so they are not inclined to pump the price. New mining pools may enter, but they haven't yet grasped enough chips to push the price up. However, when it falls, ETH doesn’t drop too much because new players are buying at the bottom.
That is to say, after Ethereum transitioned to PoS, the main exchange was from the old POW miners to the new PoS miners.
However, Ethereum successfully upgraded in September 2022, after a bear market lasting over a year, why was there not sufficient handover during the bear market phase?
On the contrary, ETH has remained sluggish throughout 2024, especially after the approval of ETFs, the BTC/ETH exchange rate has declined sharply, thus it may not be a case of transitioning from PoW to PoW, but rather from ICO veterans to Wall Street players.
2. Regarding the theory of switching Ethereum practitioners, is it just telling one’s own story?
There have already been many signals in the market, such as the previous approval of ETFs, current expectations for staking, and the increase in major addresses, all of which are objectively positive information.
Overall, the fundamentals of ETH have not changed; it remains a source of many innovations; moreover, with the support of ETFs, which have yet to release staking benefits, combined with major addresses increasing their holdings, how can one give up their chips at this time?
3. There are indeed many advantages, but some issues with Ethereum also need to be addressed:
In comparison to Bitcoin, outside the circle, the recognition of Ethereum is insufficient, so one can only wait until traditional financial institutions have fully allocated Bitcoin before looking for new opportunities and noticing Ethereum;
Compared to other Layer 1 public chains, especially Solana, ETH's biggest problem is overemphasizing the infrastructure layer while underdeveloping the application layer.
Especially the trend of脱C化 (de-Centralized from C-end users) leads the narrative of Ethereum further away from the actual needs of ordinary users, so naturally, how would ordinary users hold ETH? The ETH ecosystem needs a killer application to emerge.
Among these, solving the liquidity fragmentation through L2 interoperability is crucial. The issue of Ethereum bringing a group of L2s to fight together is that this group of L2s is loose, which not only leads to a poor user experience but also disperses liquidity.
Therefore, the interoperability of L2 is particularly important, and indeed some solutions have emerged, such as chain abstraction.
4. Carving out a sword for Solana.
In comparison to Solana, Sol's transition phase came after the FTX incident, but there hasn't been a major negative sentiment to wash many people off Ethereum yet, so it can only exchange time for space, thus Ethereum's transition is a prolonged consolidation.
Some ask: What are the drawbacks of Solana compared to Ethereum?
Solana is an enhanced version of Ethereum, improving performance at the cost of decentralization and security.
Whenever people mention Solana, they only think of it as a very fast Ethereum.
The consensus, ecosystem, and community that Ethereum possesses are all implicit moats.
Simply put, you can't create a smoother WeChat to beat WeChat, nor can you defeat Ethereum with a better-performing Ethereum.
Market competition only exists in the form of dimensionality reduction attacks, there is no parallel replacement.
Solana has not delivered a dimensionality reduction strike against Ethereum, which is its inherent "disadvantage".
5. The Ethereum market is too heavy.
ETH seems to have the momentum to wash out all small retail investors and long-term old practitioners mainly because ETH's market is too heavy, too many people are optimistic, and without major negative news, it can only wash out most people through a prolonged consolidation.
Most retail investors do not hold Bitcoin, but they generally hold Ethereum.
Everyone wants higher excess returns and looks down on Bitcoin's "stable" returns, choosing what seems to be the more promising alternative between Bitcoin and altcoins, which ironically makes the altcoin market heavier and ultimately leads to the current situation.
6. Will the BTC/ETH exchange rate continue to decline from the previous 0.05 to the current 0.03?
The crypto industry experiences short bull markets and long bear markets; in a cycle, the bull market lasts only a little over a year, combined with the early start of this bull market, if it continues to wash out, the bull market will be gone, hence the probability is very low.
7. Some ask: Why didn’t ETH gradually change hands when the price was low before, and why is it changing hands now that it has risen?
One possible reason is that the approval of the ETH ETF came too quickly, exceeding market expectations, as many believed it wouldn’t happen until at least the second half of 2024. This led to a rapid price increase for ETH at that time, but the handover was insufficient.
8. Can this wave manage to wash out Sun Yuchen?
One can only say that the great liquidation is still ongoing. Who can cut off Sun Ge? One must know that Sun Yuchen has 700,000 Ethereum, worth 2.1 billion dollars at a price of 3,000 dollars. If one wants to wash Sun Yuchen off the market, it will take a long time.
9. With so many people in the market FUDing Ethereum, should one change positions?
One can only say to cry while insisting to hold, having held for so long already, and gone through a round of bear market, the sunk cost is too high. If one changes positions now, it is very likely to fall just before dawn.
10. When will Ethereum finally lead the altcoin season?
One can only say that the timing is unpredictable, but one must observe the trend.
It's like we cannot predict the exact temperature tomorrow, but we can sense that winter is approaching.
