According to CoinDesk, despite recent underperformance, ether (ETH) could be a contrarian bet as the year-end approaches, Bitwise stated in a report on Tuesday. The asset manager highlighted that the majority of stablecoins are issued on the Ethereum blockchain, and over 60% of all decentralized finance (DeFi) assets are locked on the network.
Ether, the second-largest cryptocurrency, has seen little change year-to-date, while bitcoin (BTC) has risen 38% and Solana's sol (SOL) has increased by 31%. The underperformance of ether is attributed to risks related to the upcoming U.S. presidential election, rising competition from other blockchains like Solana, challenges in tokenomics, and a mixed response to the introduction of spot exchange-traded funds (ETFs) in the U.S.
However, Bitwise noted that Ethereum remains a dominant force in the blockchain space. The network hosts the majority of stablecoins, a significant portion of DeFi assets, and popular platforms like Polymarket. Matt Hougan, chief investment officer at Bitwise, compared Ethereum to Microsoft, emphasizing its large market cap, active developers, and user base. Hougan stated that while newer technologies are gaining attention, Ethereum's position remains strong.
Bitwise concluded that ether's challenges are not existential and that the market might reassess the cryptocurrency closer to the U.S. election, presenting a potential contrarian investment opportunity through the end of the year.
