Ethereum (ETH) has long been regarded as a cornerstone of the cryptocurrency landscape, but recent developments have raised concerns about its investment potential. Several industry experts are suggesting that the rising dominance of layer-2 solutions is siphoning value from Ethereum’s main network, leading to a substantial decrease in its perceived investment viability.
Nic Carter, a partner at Castle Island Ventures, highlighted this issue on social media, stating, “The #1 cause of this is greedy Eth L2s siphoning value from the L1 and the social consensus that excess token creation was A-OK.” This sentiment mirrors growing apprehensions regarding the sustainability of Ethereum’s ecosystem as layer-2 solutions proliferate.
Is Ethereum ‘Dead’ as an Investment?
Quinn Thompson, founder of Lekker Capital, recently declared that Ethereum is “completely dead” as an investment. He elaborated on the network’s struggles, citing a market cap of $225 billion coupled with declines in transaction activity, user growth, and revenue. In his view, while Ethereum still possesses utility, its investment case is significantly weakened.
The current ETH/BTC ratio is sitting at 0.02260, marking its lowest level in nearly five years, which further complicates the narrative for Ether as an investment asset. As of the latest update, ETH is trading at $1,894, reflecting a decline of 5.34% over the past week.
Recent reports have shown that Ethereum’s fee revenue has collapsed by 99% in just six months, mostly due to layer-2 networks absorbing users and transactions without contributing back to the base layer. This trend has prompted calls for changes in incentive structures within the Ethereum ecosystem. Adam Cochran of Cinneamhain Ventures proposed the concept of ‘Based Rollups’ as a way to improve these dynamics and enhance revenue generation for Ethereum.
Despite the challenging landscape, there remains a segment of traders who are optimistic about Ethereum’s future. Pseudonymous traders like Doctor Profit and Merlijn The Trader express bullish sentiments, asserting that Ethereum could represent one of the best opportunities in the current market.
In contrast, larger financial institutions like Standard Chartered recently revised their price predictions for Ethereum downwards—60% from $10,000 to $4,000 for the end of 2025, reflecting a growing bearish outlook.
As the cryptocurrency market continues to evolve, the discourse surrounding Ethereum’s viability as an investment asset is essential. Stakeholders, including developers, investors, and users, must engage in constructive dialogue regarding the future of Ethereum and its ecosystem, particularly as layer-2 solutions gain traction. The coming months will likely reveal whether Ethereum can adapt and thrive amidst these challenges or if it will continue to struggle as a prominent player in the blockchain space.
