Greedy L2s are the reason ETH is a 'completely dead' investment: VC

2 days ago 20

Ether's show against Bitcoin is astatine its lowest successful astir 5 years, with immoderate investors calling it a "completely dead" concern — but not each crypto traders agree.

Ether's (ETH) declining entreaty arsenic an concern comes from layer-2’s draining worth from the main web and a deficiency of assemblage pushback connected excessive token creation, a crypto task capitalist says.

“The #1 origin of this is greedy Eth L2s siphoning worth from the L1 and the societal statement that excess token instauration was A-OK,” Castle Island Ventures spouse Nic Carter said successful a March 28 X post.

Ether “died by its ain hand”

“ETH was buried successful an avalanche of its ain tokens. Died by its ain hand,” Carter said. He said this successful effect to Lekker Capital laminitis Quinn Thompson’s assertion that Ether is “completely dead” arsenic an investment.

“A $225 cardinal marketplace headdress web that is seeing declines successful transaction activity, idiosyncratic maturation and fees/revenues. There is nary concern lawsuit here. As a web with utility? Yes. As an investment? Absolutely not,” Thompson said successful a March 28 X post.

The ETH/BTC ratio — which shows Ether’s comparative spot compared to Bitcoin (BTC) — is sitting astatine 0.02260, its lowest level successful astir 5 years, according to TradingView data.

At the clip of publication, Ether is trading astatine $1,894, down 5.34% implicit the past 7 days, according to CoinMarketCap data.

Meanwhile, Cointelegraph Magazine reported successful September 2024 that interest revenue for Ethereum had “collapsed” by 99% implicit the erstwhile six months arsenic “extractive L2s” absorbed each the users, transactions and interest gross portion contributing thing to the basal layer.

Around the aforesaid time, Cinneamhain Ventures spouse Adam Cochran said Based Rollups could lick the contented of Ethereum’s layer-2 networks pulling liquidity and gross from the blockchain’s basal layer.

Cochran said Based Rollups could “directly interaction the monetization of Ethereum by making a beauteous cardinal alteration to inducement structures.”

Despite optimism toward the extremity of past twelvemonth astir Ether reaching $10,000 successful 2025 — particularly aft reaching $4,000 successful December, the aforesaid period Bitcoin touched $100,000 for the archetypal clip — it has since seen a crisp diminution alongside the broader crypto marketplace downturn.

Standard Chartered added to the bearish outlook via a March 17 lawsuit letter, which revised down their extremity of 2025 ETH terms estimation from $10,000 to $4,000, a 60% reduction.

However, respective crypto traders, including pseudonymous traders Doctor Profit and Merlijn The Trader, are “insanely bullish” and reason that Ether could beryllium the “best accidental successful the market.”