Article reposted from: Yue Xiaoyu
First, the conclusion: People are unhappy with Bitcoin at 98,000, but retail investors are thrilled with Ethereum at 3,200, indicating that most retail investors do not have Bitcoin, and the ETH market is still too heavy, not washing the majority out yet.
After comforting myself for so long, if Ethereum really can’t rise this time and becomes the new generation 'EOS', I just want to say: If Vitalik doesn't apologize, I'll hit you every time I see you.
Regarding the 'Ethereum changing operators theory', it has sparked many discussions among ETH staunch holders and staunch opponents, here are some additional thoughts:
1. Who is the new operator?
During this wave of washing, the wild operators from the old OGs (the early ICO people) have turned into formal operators of Wall Street financial institutions, and in the future, there may be state-level operators appearing.
However, Teacher TVBee provided a new perspective: transitioning from POW to POS will definitely require a change of operators. Originally, mining pools no longer had a sustainable profit model and did not want to pull the market. New mining pools may enter, but they have not yet mastered enough chips to pull the market. However, when the market falls, ETH does not drop much because the new operators are buying at the bottom.
In other words, after Ethereum transitioned to POS, the main change was from POW old miners to POS new miners.
However, Ethereum successfully upgraded in September 2022, after more than a year of bear market, why wasn't there sufficient turnover during the bear market phase?
On the contrary, ETH has remained sluggish in 2024, especially after the ETF approval, the BTC/ETH exchange rate has been on a downward trend, so it may not be the case of POW changing to POW's operators, but rather ICO veterans changing to Wall Street's operators.
2. Regarding the theory of Ethereum changing hands, is it just telling its own story?
There are already many signals in the market, such as the previous ETF approval, current expectations for staking, and increased holdings by top addresses, all of which are objective positive information.
Overall, the fundamentals of ETH have not changed, it remains the source of many innovations; and with the support of ETFs, there are positive prospects for staking; coupled with increased holdings by top addresses, how can one give up their chips at this time?
3. There are indeed many advantages, but we also need to face some problems of Ethereum:
Compared to Bitcoin, outsiders do not recognize Ethereum enough, so we can only wait for traditional financial institutions to fully allocate Bitcoin before they look for new opportunities and notice Ethereum;
Compared to other Layer1 public chains, especially Solana, the biggest problem with ETH is that it focuses too much on the infrastructure layer, while the development of the application layer is insufficient.
Especially the trend of decoupling from C-end users has led Ethereum's narrative to drift further away from the actual needs of ordinary users, so how can ordinary users hold ETH? The ETH ecosystem needs a killer application.
Among them, solving the liquidity fragmentation issue through L2 interoperability is very crucial. The idea of Ethereum bringing a group of L2 subordinates to fight as a group has the biggest problem of this loose group of L2s, which not only leads to a poor user experience but also disperses liquidity.
Therefore, the interoperability of L2 is particularly important, and there are indeed some solutions emerging, such as chain abstraction.
4. Carving Sol seeks a sword
In contrast to Solana, the phase of Sol's ownership change occurred after the FTX incident, but ETH currently lacks major negative news to wash many people out, so it can only exchange time for space, making ETH's ownership change a prolonged washing process.
Someone asked: Does Solana have any disadvantages compared to Ethereum?
Solana is a performance-enhanced version of Ethereum, improving performance at the cost of decentralization and security.
Whenever Solana is mentioned, people only think of it as a very fast Ethereum.
Ethereum has consensus, ecology, and community, all of which are implicit moats.
In simple terms, you cannot create a smoother WeChat to defeat WeChat, nor can you use a better-performing Ethereum to defeat Ethereum.
Market competition only exists in the form of dimensionality reduction attacks, and there is no such thing as parallel replacement.
Solana has not caused a dimensionality reduction attack on Ethereum, which is a native 'flaw'.
5. The ETH market is too heavy.
ETH seems to have a momentum to wash out all small retail investors and medium to long-term old operators, mainly because the ETH market is too heavy, too many people are optimistic about it, and without major negative news, it can only wash out the majority over a long time.
Most retail investors do not have Bitcoin, but basically have Ethereum.
Everyone wants higher excess returns and looks down on Bitcoin's 'stable' returns, choosing the seemingly more promising altcoins between Bitcoin and altcoins, which instead makes the altcoin market heavier, ultimately resulting in the current situation.
6. The exchange rate of BTC/ETH has dropped from 0.05 to 0.03, will it continue to decline in the future?
The crypto industry experiences short bull and long bear markets, with the bull market only lasting a little over a year in a complete cycle. Given that this bull market started early, if it continues to wash out, the bull market will be gone, making this probability very small.
7. Someone asked: Why didn't ETH slowly change hands when the price was low before? Why is it changing here now that it's rising?
One reason may be that the ETH ETF was approved too quickly, exceeding market expectations. At that time, many believed it would not be approved until at least the second half of 2024. This led to a rapid increase in ETH's price, but the turnover was insufficient.
8. Can this wave change hands for Mr. Sun Yuchen?
One can only say that the big cut is still a big cut, it has always been. Who can cut Sun Yuchen? It should be known that Sun Yuchen has 700,000 ETH, valued at 2.1 billion dollars at a price of 3,000. If you want to wash Sun Yuchen out, it will take a long time.
9. There are so many people FUDing Ethereum in the market, should I change positions?
One can only say that crying is still necessary to hold on, as it has been held for so long, already experiencing a bear market, the sunk cost is too high. If you change positions at this time, it is very likely to fall before dawn.
10. When will Ethereum be able to take off the altcoin season?
One can only say that the time is unpredictable, but the trend must be visible.
It's like we can't predict what tomorrow's temperature will be, but we can feel that winter is coming, indicating seasonal changes.
