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ethereum (Crypto: EthThe second largest encrypted currency, according to the market value, has drew a completely opposite path when compared to his older brothers, Bitcoin (Crypto: BTC), During the past year.
Consider this. Bitcoin jumped 32 % a year, reaching the highest level ever at $ 109,000. Its share in the total cryptocurrency market has expanded from 52 % to 60 %.
Ethereum, on the other hand, has contracted 39 % at the same time, reducing its market share from 16 % to 8 %.
The wide gap has sparked discussions on the role of Ethereum in the hierarchy of the cryptocurrency and its future periodic periodic that Benzinga spoke to a few analysts to understand the factors that contribute to the continuous transformation of the ecological system.
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Jeffrey is, Head of Investment Research in the Director of Digital Assets Hashkey CapitalIt is believed that the error lies in the economic model of Ethereum.
“The activation of the EIP-1559 allows the burning of more ether in order to shrink when the ether activity is high on the ETHEREUM; however, in order to increase applications support on the chain, Ethereum must expand.”
The Ethereum London Hard FORK, is called its name Eip-1559The mechanism of burning a network symbol was provided. Under this mechanism, the basic fees are removed, that is, the minimum fees for each treatment, to add deviation pressure to the ETH and increase its value.
What is the exact problem?
He emphasized that climbing layer 2 Blockchains and Dencun upgrade,, Which reduced the fees on the L2S with orders by size, converting the activity on the chain away from the ethreum series, which leads to inflation.
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According to ultrasound funds, the ETH rate began to slow down in May 2024, and since early February, the currency width has increased.
Source: Ultrasound Money
Trever KoverkoAnd web3 investor and co -founder of Sabine, Echo these notes.
“Ethereum is struggling to create a story on how to accumulate L2 and not extractive for the main series,” he added.
However, L2S was not the only competition that Ethereum faced.
Ho said: “Ethereum does not care well in terms of society's culture. On the contrary, Solana focuses more on the culture of the Mimi currency community, which attracted more development of applications and transactions on the series,” he said.
During the past year, Solana (Crypto: TellerIt has already become the point of communication of the MIM coin, helped by the Mimi Al -Saim currency generator in use pump.fun. In fact, the president Donald Trump And the first lady Melania Trump Solana also chose to launch them Trump official (Crypto: Trump) And The official Melania (Crypto: MelaniaCurrencies, respectively.
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It should be noted that Ethereum is still the only cryptocurrency other than bitcoin His trading fund with immediate exchange In Wall Street, however, the flows were relatively defeated.
Hymancho Maradia, Founder and President, CIFDAQ GlobalThis was mentioned because there is no clear consensus on the list of ethereum.
“The lack of the pure proposal of the value and is often seen as the” middle child “of the ecosystem for encryption, the ETHEREUM is struggling to capture the same institutional confidence,” as he argued Maradia.
He also pointed out that the absence of exciting rewards made Ethereum ETFS less attractive, which can be treated given that new requests have been submitted to allow them to do so.
A spokeswoman for ETHEREUM-a non-profit organization devoted to the promotion and development of technologies related to ETHEREUM-was designed to comment on its stake in the ETH market, but said that its focus was on the development of the ecological system.
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This article Why is Ethereum from Bitcoin backward – an analyst core inflationary problems, Dencun upgrade retreat, and Meme currencies in Solana Originally Benzinga.com