Recently, BTC has broken through the downward channel, rising from around 60k to 67-69k, and is about to break upward. However, ETH has been fluctuating sideways since August. The sideways movement is really extraordinary.
At the end of August, I wrote an article on the life dilemma of Ethereum (ETH) on August 27, 2024, in which I put a chart of the exchange rate trend of ETH/BTC. At that time, it had fallen below the key psychological level of 0.05, but was still above 0.04. Now it has effectively fallen below 0.04 and has reached the "3-digit" level.
Since the end of 2022, which is the bottom of the most recent bear market that just passed, ETH/BTC has been falling all the way, from close to 0.08 (which is actually a performance close to the peak of the bull market at the end of 2021), to now below 0.04, almost halved.
This means that if you had not quickly exchanged your ETH to BTC when the altcoin craze hit the end of the bull market in 2021, or when BTC oversold at the end of the bear market in 2022, you would have only been able to exchange half of the ETH for BTC. That is, measured in BTC terms, holding ETH has already lost half of its value.
BTC’s market capitalization is close to 60%. And it seems that the market is getting closer and closer to a sudden rally. It is hard to say whether ETH/BTC will hit a new low one day. After all, the lowest in 2019 was 0.02.
But this does not mean that it is wise to change positions now. The reason is simple: everyone knows that making money is buying low and selling high, and losing money is buying high and selling low. Cutting losses now is definitely not selling high.
Judging from the relationship of market value, it can be said that ETH has a strong rival BTC in front and has established its position as a store of value; but it is being chased from behind and has lost a large part of the market to side chains (new public chains) represented by Solana - the "cryptocurrency speculation" market.
The blockchain or crypto industry has been developed for 15 years, and only two demands have been verified to be true: one is the value storage of BTC, and the other is currency speculation. These two are the truly verified PMF (Product-Market Fit). All other so-called blockchain application demands are pseudo-demands, and none of them has been proven to have real commercial value.
"Cryptocurrency speculation" can be broken down into three parts: coin issuance, trading, and derivatives. The corresponding on-chain applications are ICO, DEX, and various DeFi (such as lending). "Coins" include homogeneous tokens and non-homogeneous NFTs (so-called digital collectibles).
Strip away the rhetoric and sweet talk, and it all comes down to one word: "speculation". What is "speculation"? It means not creating value, but only transferring wealth. "Speculation" is a game, a game that takes wealth out of the pockets of a lot of people and puts it into the pockets of a few people.
"Currency" is the tool and "speculation" is the goal.
If you see through this essence, you will understand:
In 2017, ICO was popular and all of them used Ethereum to issue coins, with ETH/BTC reaching an all-time high of over 0.11.
In the summer of DeFi in 2020, the leading DEX Uniswap pioneered the speculation of local dogs on the chain. In the first half of 2021, SHIB broke the circle, "new leeks only knew SHIB but not BTC", and NFT used the banner of "art" to attract down-and-out artists to join the circle for "harvesting". It was a good saying "stupid people with a lot of money come quickly"... All of these fell on the Ethereum chain, which was overcrowded for a while, and the fees soared, and it was jokingly called the "noble chain". ETH/BTC also once rebounded to 0.08.
A restaurant is packed. Smart people will seize the opportunity and quickly open a new restaurant next to it to share a share of the traffic bonus. So in 2021, the new public chain track exploded. Various so-called new public chains (such as Solana) emerged, taking over the overflow traffic of Ethereum, and they were very happy.
Everyone knows that these stores with "restaurant" signs have a constant stream of customers, but none of them are there to eat; they are all there to play cards (gamble).
So this new restaurant worked even harder, and even tore off the fig leaf. Forget about the crypto vision, decentralization, and value proposition. Guests come to our restaurant to speculate in coins. Coin issuance tools, go! Meme coins are issued in batches, hundreds or thousands of them are issued a day. Trading tools, go! Low fees, smooth and smooth. One coin, one meme, one coin, one plate. The plate opens, the plate collapses, three to five days is not short, ten days and half a month is not long. Rush in, work hard, accomplish in one go, and disperse in a hurry. Those who run slowly can't catch up with the hot shit.
The fat meat of the cryptocurrency market has been snatched away from Ethereum by the new public chains.
The seven-day transaction volume of Solana’s on-chain DEX is nearly twice that of Ethereum.
When all the cryptocurrency trading traffic goes to Solana or other places, what will be left for Ethereum?
2024 is the year when the crypto industry becomes disillusioned with value.
Those who believe in the value of cryptocurrencies only believe in BTC. Those who do not believe in the value of cryptocurrencies only speculate in meme coins.
These two types of people will no longer step into Ethereum.
People left, users left, and the market was lost. This is the main reason why ETH has been declining in the past two years.
Why do BTC users not leave but become more and more loyal? Because the demand for value storage has extremely strong user stickiness. "Security" is a truly scarce product.
But the demand for "cryptocurrency speculation" is completely different. For this type of users, speculation is speculation, and gambling is gambling. So there is almost no stickiness. Whichever chain is more colorful, more exciting, and has more dreams of getting rich, they will flock to it.
Ethereum technology is advanced and its architecture is more decentralized, but users are often insensitive to technology. They only care about the perceptible experience, whether the operation is simple and smooth, whether it is fun to trade, whether their adrenaline can soar, and whether there are new things to do every day, as colorful as the experience in Macau or Las Vegas.
The current performance of ETH has forced the community to start rumors that Vitalik Buterin has broken up with his girlfriend and is ready to focus on Ethereum. However, even though Vitalik talks about technology and high-end application scenarios all day long, he still cannot win back the hearts of users who have flocked to Solana and other platforms to buy coin and hype memes.
Therefore, Ethereum still needs to think clearly. It will never be able to surpass BTC in value storage, and it has been "intercepted" by Solana in cryptocurrency speculation. So what is its own positioning, which market should it occupy next, and who should pay for it?
If you don’t pay, I don’t pay, and he doesn’t pay, then the coins sold by the Ethereum Foundation every day can only be paid by the leeks in the secondary market. SK65586
