99,000 Bitcoin makes everyone unhappy, while 3,200 Ethereum has retail investors thrilled, indicating that most retail investors do not hold Bitcoin. The Ethereum vehicle is still too heavy, and most people have not been washed off the vehicle yet.
ETH's long-term struggles still require some psychological reassurance for everyone.
One reason for ETH's long-term struggle is the perspective that it is currently in a transition phase, with large financial institutions on Wall Street becoming the new players, gradually taking over the chips from the previous wild players.
We can also verify from the data that in the past year, the market share of the top 100 holding addresses has been on the rise, currently reaching 66%, especially after the approval of the ETH ETF.
This indicates that the concentration of ETH is actually increasing. Top addresses continue to buy, but ETH's price has not risen. What does this indicate?
On one hand, it indicates that the players have always been present and are continuously accumulating; on the other hand, it shows that there is significant turnover in the market, not only are retail investors offloading their chips but also top addresses are swapping internally, meaning they are changing hands.
It should be noted that ETH and BTC are the only tokens with ETFs, and ETH has a significant advantage over BTC: staking rewards.
Once the ETF starts offering staking rewards or even re-staking, an annual risk-free return of at least 3% in coin terms will be very attractive, especially compared to traditional financial products.
This is the unreleased potential of ETH, and also its greatest potential benefit.
Naturally, traditional financial institutions will not miss out on this cake, having a strong willingness and motivation to become the new players in ETH.
But ETH has already been the main narrative in two cycles of bull and bear markets, so there are naturally more long-term holders, and the chips are more dispersed. Therefore, the time needed for this chip turnover is relatively long and requires sufficient washing out.
Therefore, to suppress ETH's price in the long term, previous long-term holders must offload their chips, such as switching to popular SOL, so that chips can concentrate in the hands of new players.
Only after the new players have accumulated enough chips will there be motivation to drive up the price of ETH.
This is a conspired scheme.
Therefore, do not discard the truly valuable chips in hand, namely BTC and ETH. Enduring this long and painful washing process is necessary to achieve the long-term returns you truly desire.
Who is the new player? When will the washing be completed?
99,000 Bitcoin makes everyone unhappy, while 3,200 Ethereum has retail investors thrilled, indicating that most retail investors do not hold Bitcoin. The Ethereum vehicle is still too heavy, and most people have not been washed off the vehicle yet.
After comforting myself for so long, if Ethereum really doesn't rise this time and becomes the new generation 'EOS', I just want to say: if Vitalik doesn't apologize, I will hit you every time I see you.
Regarding the theory of 'Ethereum changing hands', it has sparked numerous discussions among steadfast holders and staunch opponents of ETH. Here are some additional thoughts:
1. Who exactly is the new player?
In this wave of washing, the wild players from the original ICO group have become the legitimate players of Wall Street financial institutions, and in the future, there may even be state-level players.
However, Teacher TVBee provided a new idea: transitioning from pow to pos will definitely involve changing players. The original mining pools have no sustainable profit model, so they are no longer interested in pumping the price. New mining pools may enter, but they do not yet hold enough chips and cannot pump the price. However, when prices fall, ETH does not drop much because the new players are buying at the bottom.
This means that after Ethereum transitions to pos, the main change is from the old pow miners to the new pos miners.
However, Ethereum successfully upgraded in September 2022, and after more than a year of bear market, why was there insufficient turnover during the bear market phase?
ETH is instead struggling in 2024, especially after the ETF approval, with the ETH/BTC exchange rate continuously declining. Therefore, it might not be a change from pow to pow, but rather from ICO veterans to Wall Street players.
2. Regarding the theory that Ethereum is changing hands, is it just a story told to oneself?
There have already been many signals in the market, such as the previous ETF approval, the current anticipation of staking, the increase in top addresses holding, etc. These are all objectively positive pieces of information.
In general, ETH's fundamentals have not changed; it remains a source of many innovations. Moreover, with the support of ETFs, there are benefits to unlocking staking; coupled with the increase in top addresses holding, how can one hand over chips at this time?
3. There are indeed many advantages, but we must also face some issues with Ethereum:
Compared to Bitcoin, outsiders do not have enough recognition of Ethereum, so they 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 an excessive focus on the infrastructure layer, while the development of the application layer is insufficient.
Especially the trend of disassociating from C-end users makes Ethereum's narrative increasingly distant from the actual needs of ordinary users. Naturally, how can ordinary users hold ETH? The ETH ecosystem needs a killer application to emerge.
Among them, solving the liquidity fragmentation through L2 interoperability is very crucial. The issue with Ethereum leading a group of L2s in a fight is that this group of L2s is disorganized, which not only leads to poor user experience but also disperses liquidity.
Therefore, L2 interoperability is particularly important, and some solutions have indeed emerged, such as chain abstraction.
4. Carving Sol for the sword
In contrast to Solana, Solana's transition phase occurred after the FTX incident, but currently there is no significant bad news to wash many people off Ethereum; it can only exchange time for space, so ETH's transition is a lengthy washing process.
Someone asked: What are the disadvantages of Solana compared to Ethereum?
Solana is an enhanced version of Ethereum, improving performance at the cost of decentralization and security.
When people mention Solana, they often think of it as a very fast Ethereum.
Ethereum possesses consensus, ecology, and community, which are all 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 dimensionality reduction attacks, not in parallel replacements.
Solana has not delivered a dimensional blow to Ethereum, which is its inherent 'flaw'.
5. ETH's vehicle is too heavy.
ETH seems determined to wash out all small retail investors and medium to long-term old players, mainly because the ETH vehicle is too heavy, with too many people holding it. There is no significant bad news, so it can only wash out most people through a lengthy process.
Most retail investors do not hold Bitcoin, but basically all have Ethereum.
Everyone wants higher excess returns and looks down upon Bitcoin's 'stable' returns. In choosing between Bitcoin and the second coin, they seem to prefer the one with more potential, which instead makes the second coin heavier, ultimately leading to the current situation.
6. Will the ETH/BTC exchange rate continue to decline from the previous 0.05 to the current 0.03?
The cryptocurrency industry has short bull and long bear cycles. In a cycle, the bull market is only this year, and since this bull market started early, if it continues to wash, the bull market will disappear, making this possibility very small.
7. Someone asked: Why didn't ETH slowly change hands when the price was low before? Why is it changing hands here now that it has risen?
One reason might 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 rise in ETH's price, but the turnover was insufficient.
8. Can this wave wash out Sun Yuchen?
One can only say that large cuts continue unabated. Who can cut Sun Brother? It should be noted that Sun Yuchen holds 700,000 Ethereum, valued at $2.1 billion at a price of 3,000. If one wants to wash Sun Yuchen off the vehicle, it will take a long time.
9. With so many people in the market fudging Ethereum, should one change holdings?
One can only say that even while crying, one must persist in holding. Having held for so long already, having endured a round of bear market, the sunk cost is too high. If one changes holdings now, it is very likely to fall just before dawn.
10. When will Ethereum ignite the competitive coin boom?
One can only say that the timing is unpredictable, but the trend can be observed.
Just like we cannot predict tomorrow's temperature, we can feel that winter is coming.
