What’s going on with Ethereum? Should we even care?

Institutional Crypto Research Written by Experts

Author

Markus Thielen
May 06, 2024

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👇1-14) Ethereum remains this cycle’s basket case. Surprisingly, BTC and ETH remain highly correlated, with an R-square of 95%. Ethereum’s weak fundamentals are becoming a roadblock for Bitcoin as they prevent broad fiat inflow into the crypto ecosystem.

👇2-14) During the last 2020/2021 cycle, ETH was the driver as Ethereum was supposed to replace the legacy banking system. NFT minting opened new areas of crypto adoption that could have expanded into various personalized documents on the blockchain, driving broad ‘wallet’ adoption. However, Ethereum developers did not react quickly enough.

👇3-14) In 2017, Bitcoin transitioned from a peer-to-peer currency to becoming purely digital gold when the developers (including the Bitcoin miners as enforcers) decided to keep the block size of 1MB (explained here). With the explosion of sovereign deficits and the proven path of currency debasement, Gold and Digital Gold have their place in ‘sovereign individuals’ portfolios. This is why Bitcoin has become highly sensitive to inflation and deficit numbers.

Ethereum - we think we know where ETH might be going next…

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