Why Ethereum has stagnated? Bitwise answers
The cryptocurrency's price against bitcoin recently hit its lowest level in three years.
Ethereum faces a risk from the US presidential election, says Bitwise.
Despite everything, Ethereum is like the Microsoft of cryptocurrency networks, it notes.
It's fine to hate Ethereum right now, but this could seem like nonsense in the future," says a recent report from digital asset manager Bitwise, written by its chief investment officer, Matt Hougan.
Hougan's analysis sheds light on the reasons for the stagnation of ether (ETH), the ecosystem's native cryptocurrency, which has performed weakly this year compared to its main competitors, the report indicates. In addition, in the third quarter of this year, the cryptocurrency has fallen by more than 30%, exceeding the 13.64% drop recorded in the same period of 2023. In contrast, bitcoin (BTC) has risen by 38% and solana (SOL), Ethereum's main competitor, has increased by 31% in the same period.
There are multiple reasons behind Ethereum's stagnation
The first brake on Ethereum has to do with the impact of the presidential elections in the United States and regulation. The network could face a significant risk due to the electoral process, scheduled for November 5.
Unlike bitcoin, which has largely overcome regulatory scrutiny, Ethereum remains under the eye of the Securities and Exchange Commission (SEC). The agency considers staked ether to be a security, which represents “a threat” to its ecosystem, especially decentralized finance (DeFi), where much of ETH’s value comes from.
