Analyzing 6 reasons for Ethereum’s stagnant price: Unexpected upgrade impact, ETF losses, and failure to keep up with the trend…

Ethereum was once considered a “blue-chip asset” in the crypto market, and its price was widely believed to reach new highs in the future, even breaking through $10,000.

However, ETH has been performing poorly since 2022. Does this indicate a challenge for Vitalik and Ethereum’s future? Let’s delve into the reasons behind this.

1. The gap between expectations and reality

Over the past two years, Ethereum’s major upgrades have fueled high expectations for its future, especially the “deflationary” effect of ETH supply. However, the actual market performance has been surprising. Despite a series of scaling and upgrades, ETH’s market performance has been relatively weak, even significantly outperforming BTC and other tokens such as Solana.

2. The failure of the ETH ETF

Many expected the launch of the ETH ETF to drive up the price of ETH, but the result was a major disappointment. Unlike the surge following the launch of the Bitcoin ETF, the ETH ETF experienced capital outflows after its listing, partly due to selling pressure from Grayscale’s legacy products.

3. Unexpected impacts of the upgrade

The Ethereum Merge and EIP-1559 did successfully reduce the issuance of ETH, but the latest Dencun upgrade, while reducing the cost of writing data to the main chain, indirectly reduced ETH’s revenue sources and unexpectedly lowered the token’s appreciation potential.

4. Vitalik’s ETH sell-off raises concerns

Ethereum founder Vitalik Buterin recently sold a portion of his ETH to support development. Although the sale was relatively small, it generated negative sentiment in the market. Some investors believe this may indicate a lack of confidence in ETH from Vitalik, even though he has repeatedly stated that ETH price is not a priority for him.

5. Absence in Emerging Trends

Many emerging trends in the market today—such as AI, RWA (Real-World Assets), and memecoins—have largely avoided Ethereum as their primary platform. Many emerging AI projects (such as Fetch and TAO) and RWA projects have opted for more suitable independent networks and underlying architectures, while in the memecoin space, Solana has clearly outperformed. This means that while Ethereum has opened the door to decentralization, other networks are becoming the dominant force in the latest narrative.

6. The future value of ETH

Ethereum (ETH) remains a mainstay of the decentralized finance (DeFi) ecosystem, accounting for over 55% of the total value locked. However, with the increasing adoption of L2 scaling solutions, Ethereum may face a dilemma of “ecosystem prosperity but token value failure,” similar to the $ATOM coin in the Cosmos ecosystem.

Personal Outlook

While I once firmly believed that ETH would reach $10,000, I am now more cautious about that goal. ETH still accounts for 30% of my portfolio, but in the next bull market, I may gradually sell some of it and hold the remainder to observe its future performance over the long term.

in conclusion:

Ethereum’s network utility and ecosystem position remain solid, but recent performance has raised concerns in the market. While ETH remains the industry leader, it may gradually lose some of its dominant position if it fails to adapt to emerging trends. Ethereum still possesses a significant first-mover advantage in the decentralized field; however, whether it can maintain its core value depends on finding a new balance between L2 development and other emerging narratives.

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