The host of popular crypto channel Coin Bureau is evaluating Ethereum (ETH) after the leading smart contract platform has had a disappointing start to the new year.
In a new video, the analyst known as Guy shares his personal thoughts on Ethereum to his 1.9 million YouTube subscribers after the leading smart contract platform lost over 34% of its value in the first weeks of 2022.
“I am currently disappointed in the performance of ETH so far this year. Then again, it’s not an ETH-only issue.
The entire crypto market has been dragged through the mud together with the rest of the financial markets.”
Guy next digs into the details behind why some people are frustrated with Ethereum but notes that crypto whales and miners continue to accumulate ETH.
“It’s important to be able to separate out fundamental value from price. Yes, ETH 2.0 has been a whipping boy for some time. People are growing impatient as to the progress. This is understandable but it’s equally important to appreciate just how much work is being done behind the scenes.
Headlines and clickbait don’t reflect the code commits. Moreover, in the interim, there are a plethora of layer-2 scaling solutions that are building a great deal of value on the Ethereum network. Value for their own blockchains and value for the base chain. Value that’s most likely to exponentially multiply when sharding is complete.
Investors, whales and miners are stacking. Once ETH transitions to a cleaner proof-of-stake consensus, this could provide the impetus for an ocean of capital to flood in.”
The Coin Bureau host also says that despite these optimistic signs, risks such as making a successful network merge as well as macroeconomic factors all remain in play for Ethereum.
“It’s as important as ever to highlight that there are risks. The Merge is the biggest upgrade that Ethereum has been through. Yes, it’s been rigorously tested, but when you have an upgrade that impacts $374 billion of value, the stakes are incredibly high.
Moreover, there are no guarantees that The Merge goes through before this market cycle comes to an end. ETH 2.0 delays are commonplace, and [Federal Reserve Chairman Jerome Powell] is lifting those interest rates. The ‘taper tantrum’ is underway.”
Guy concludes his analysis by discussing several of Ethereum’s competitors, all of which had a breakout year in 2021.
“We cannot be oblivious to the threat of other incredibly strong layer-1 blockchains – Avalanche (AVAX), Solana (SOL), Fantom (FTM), Terra (LUNA) and Cardano (ADA). All are competing for a piece of that ETH pie.
I hold some of those as well as a hedge for my ETH position. But of course, there’s a reason why that ETH position is the largest in my portfolio and there is a reason I bought ETH in the dip a few weeks ago.”
At time of writing, the second-ranked crypto asset is trading at $2,408, down 1.53% in the last 24 hours.
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