Ethereum once performed amazingly in the past bull market, soaring from $81 to $4,800, a 60-fold increase, attracting the attention of countless investors. However, in the current bull market cycle, Ethereum's performance is not satisfactory, only rising from $881 to about $4,000, an increase of less than 5 times. This phenomenon disappointed many Ethereum supporters, and they even began to question whether Ethereum can rise sharply again in this round of bull market.
Why did Ethereum fail to continue the glory of the last bull market?
1. Ethereum’s own characteristics
Cryptocurrencies in the blockchain ecosystem can be roughly divided into two categories: one is "meme coins" that lack practical uses, and the other is "utility coins" with practical value. In this classification, Bitcoin is often regarded as "digital gold" and is mainly used as a store of value, while Ethereum is considered a "smart contract platform" with a wide range of application scenarios.
1. Maturity and development stages
Since its birth, Ethereum has grown from a start-up project to a mature platform with a huge market value after years of development. Similar to a large-scale enterprise, Ethereum often finds it difficult to achieve explosive growth in its mature stage. In contrast, during the last bull market, Ethereum was still in a stage of rapid expansion and innovation, with greater room for growth.
2. Competitive pressure
With the continuous advancement of blockchain technology, more and more competitors are emerging. For example, emerging public chains such as Solana, Cardano, and Avalanche have attracted a large number of developers and users with higher performance, lower transaction fees, and a stronger ecosystem. These competitors have put considerable pressure on Ethereum, limiting its further expansion in the market.
2. Ethereum’s market value
1. Market capitalization
As of now, Ethereum's market value is about $2.21 trillion, while Bitcoin's market value is about $8.86 trillion. Although Ethereum's market value seems to be smaller, considering Bitcoin's wide recognition and solid market position, Ethereum is already at a relatively high market value level. In this case, it becomes increasingly difficult to achieve a substantial increase in market value.
2. Growth characteristics of mature enterprises
From an economic perspective, as the scale of an enterprise expands, it becomes increasingly difficult to maintain high growth. As a "giant" in the blockchain field, Ethereum's further growth in market value needs to face a more complex market environment and higher barriers. Similar to traditional enterprises, after reaching a certain scale, the profit growth of enterprises tends to stabilize, and it is difficult to reproduce the explosive growth in the early stage.
