Ethereum’s crossroads: Go, or hold on?

ETH/BTC hit a five-year low, the old ecosystem leaves, and new narratives cannot come - Ethereum is trapped in the middle of technology upgrades and value dilution.

Guard E is still talking about ideals, but reality is liquidating beliefs.

This time, we don’t talk about feelings, we only talk about judgment: Is ETH worth it? What are the bulls and bears betting on?

1. Look at the bullish camp: moat stability + technical dividend + macro

benefits

Although Ethereum's price has not yet taken off, the bulls believe that the long-term value of ETH is still accumulating. The ecological fundamentals are solid, technological upgrading is being promoted, and macro expectations are gradually improving, providing it with triple support.

1. Ethereum is still the absolute center of underlying infrastructure: Bitwise CIO @Matt_Hougan pointed out that ETH dominates the three major trends of stablecoins, tokenization and AI Agent. As long as Ethereum achieves a better user experience through Layer 2 without losing its original position in the hearts of institutions, the prospects are very optimistic and tend to be bullish. Masterkey's managing partner Saul Rejwan judged that once the policy is relaxed, ETH will be the beneficiary of the first round of DeFi and DePIN. @BTW0205 believes that although it is short-term, in the medium and long term, Ethereum still has ecological inertia and system-level advantages. As long as it can reconstruct the value model and promote the implementation of new narratives, there is still a possibility that the king will return.

2. Technology upgrades continue to release structural dividends: The Prague/Electra upgrade is imminent, and the performance improvement of Rollup will make ETH faster, cheaper and more open. Gas reduces attracting more users to return, and also strengthens the urgent need for ETH use. The bulls believe that the market has not yet priced these structural optimizations. @binji_x also believes that the prototype of the "Ethereum Super Chain" is emerging and is expected to open up new growth space.

3. Signal of ecological structural adjustment: @feifan7686 believes that Ethereum is shifting from technology-oriented to a development path dominated by capital and ecosystem. Pectra upgrades and adjusts ETH attributes, cross-chain testing alleviates performance shortcomings, and oracle layouts compete for pricing power, behind it is a systematic "self-rescue" around capital structure and ecological discourse power. Although it is difficult to immediately reflect the price in the short term, the direction is clear and the overall tendency is bullish.

4. Secondary traders shouted "ETH is undervalued": well-known crypto analyst @rovercrc and well-known trader and former BitMEX CEO @CryptoHayes posted articles one after another, pointing out that ETH is undervalued by the market. Hayes further predicts: ETH will lead SOL to $5,000. Although this kind of view is radical, it reflects that mainstream traders are re-examining the ETH valuation space.

5. Macro liquidity-driven impact: @0xVeryBigOrange believes that no matter how many technical routes or ecological discussions are around Ethereum, there is only one fundamental reason for the current price stagnation - macro liquidity has not been released yet. It’s not that ETH is not good, the entire market has not yet entered the “water release cycle”.

6. Potential opportunities for bull market rotation: ETH has not risen, not because there is no chance, but because the rotation has not yet reached it. Coupled with the expectation of interest rate cuts and the progress of ETFs, ETH has the potential to return from the edge to the center. DigitalCoinPrice estimates that the optimistic scenario will reach $7,000 at the end of the year and may see $47,000 in the future by 2030.

7. TVL firmly ranks first, and on-chain funds still hold heavy positions in ETH: Ethereum’s current TVL is US$49.85 billion, accounting for more than half of the entire network’s DeFi. Although Solana and Tron performed well, ETH is still the most stable pool in terms of "saving money on the chain".

8. The inflation rate is lower, and the supply model is better than BTC: ETH issuance is only 0.5% annually, far lower than BTC's 0.83% (66% faster than ETH). This view emphasizes that Ethereum inflation rate is much lower than Bitcoin and that the monetary model is more sustainable.

9. Leading in the developer ecosystem: Venture Capital, a venture capital institution, released its annual report stating that ETH has 65% of the world's on-chain developer innovation activities, with more than 6,200 active developers per month, and the annual growth rate of L2 developers reaches 67%. These data suggest that Ethereum still occupies a central position in the developer community.

10. Foundation reform enhances governance expectations: Vitalik announced the restructuring of the foundation to improve the efficiency of technical decision-making and enhance transparency. For systemic assets like ETH, upgrading the governance structure means increasing long-term certainty.

In summary, what the bulls believe in is: Ethereum is the value precipitation pool of Web3, which is laying the technology for the next decade, and short-term prices are not the core.

2. Bearish camp: Faith landslide + Value capture failure + Route dispute

The core view of short sellers is: times have changed, ETH lags behind competitors in terms of growth, structure, efficiency and narrative, the technology route has not been converted into token value, and the ecosystem is also facing division.

1. From the perspective of institutional perspective, ETH may not have fallen to the right level: @jason_chen998 believes that the fundamentals of Ethereum have expired. The only positive news at present is ETF pledge, but core institutions such as BlackRock have not taken action yet, which reflects that they are still lowering prices to absorb funds, indicating that ETH may not have fallen to the right level. Overall, it is bearish.

2. The ETH ecosystem has lost its growth engine: @Loki_Zeng believes that the Ethereum ecosystem has been completely silent in Q1 2025, with severe declines in on-chain data, traditional sectors (DeFi, L2, NFT) almost stagnant, and new hot spots (AI, Meme) have nothing to do with ETH. The ETF pledge, which was once highly anticipated, is good, but it is not actually attractive, and it is difficult for large funds to accept the low-yield and high-cost allocation logic. Overall, ETH lacks substantial growth momentum and is bearish.

3. RWA narrative disillusionment, Ethereum may not be the optimal solution: @yuyue_chris questioned Ethereum's actual ability in the RWA track. Although ETH has long been regarded as the "safety bearer" of RWA assets, its weak currency price and the liquidation risks caused by the PoS mechanism are weakening its credibility as the underlying RWA. Overall, it is doubtful that Ethereum's ability to carry global RWA is overestimated, and its supporting role in RWA is biased towards bearishness.

4. On-chain growth slowed down: @PANewsCN researcher @wsy2021111 mentioned in his commentary in December 2024 that the growth of ETH main network user has stagnated in the past year, and a large number of new users prefer new chains such as L2 or Solana. In his opinion, Ethereum is transforming into a "value sedimentation pool for large players", and ordinary small users and emerging popular applications prefer chains with lower handling fees and faster speeds. This view highlights the pressure Ethereum faces in user growth.

5. Supply volume enters an inflationary state: As online transaction fees continue to decline, Ethereum's daily burn volume fell to historical lows. This has resulted in a sharp drop in the estimated destruction rate of ETH, resulting in an increase of about 0.76% annually, or about 945,000 new ETHs per year. Today, Ethereum's overall supply has exceeded its pre-merger level.

6. The ETH/BTC ratio breaks a five-year low: On March 31, analyst James Van Straten said that the exchange rate of ETH against BTC fell to 0.02193, a five-year low. Under the BTC halving market and the new L1 rotation, ETH has become the "most non-rising mainstream currency", funds gradually flow out, and faith is shaken.

7. New public chains such as Solana are rising, and ETH competition is intensifying: Solana has a lighter user experience and a more lively cultural atmosphere, attracting a large number of incremental users and developers. The chains such as Base and Sui are growing actively, and the ETH main network has gradually become a base for institutions and traditional projects, losing the attractiveness of young projects.

8. Questioning whether to empower or weaken the value: Investor John Pfeffer said that the technology route currently implemented by Ethereum is beneficial to users and bad for the value of tokens. Layer2 expansion and PoS transformation will reduce main chain congestion and handling fees. Although this improves the on-chain experience, it reduces the consumption of ETH per transaction.

9. Core application outflow: At the end of 2024, it was reported in the industry that Uniswap plans to launch an independent chain, and Uniswap is the largest source of ETH Gas, accounting for more than 14%. If it moves the chain, ETH will lose hundreds of millions of dollars in handling fees every year, and will also lose an important source of combustion, and the risk of ecological siphon is intensified.

10. The foundation was accused of cashing out at a high level, and governance trust was questioned: the Ethereum Foundation was exposed to sell at a high level at the end of 2024, which triggered "internal bearish" speculation. The superposition of problems such as inefficient governance and slow expansion has made the community lose confidence in future development.

11. The community routes are obvious: Base head Jesse Pollak and core developer Dankrad Feist have fundamental differences in the dependence of the main network and L2, the routes are unclear and the execution efficiency is reduced. Although Vitalik speaks out, his overall sense of direction is insufficient and his strategy is swaying.

In short, the core logic of bears is: Ethereum is in a dilemma of technology forward and price lag, while the ecological center of gravity, narrative power, and user growth are all quietly slipping away.

3. So, what kind of judgment should be made now?

Based on the above long and short factors, we can make the following comprehensive analysis based on the mentality and decision-making of coin holders:

1. Coin holders who focus on long-term value

If you believe that ETH represents the infrastructure layer of Crypto in the future, with the widest developers, the strongest DeFi ecosystem and a continuous evolutionary technical route, the developers, funds, and structural narratives have not yet collapsed, and it is still the core carrier chain of the new narrative (DePIN, AI Agent, RWA). Then, it is a logical choice to hold or even increase positions in batches and wait for the next cycle.

2. Focus on medium- and short-term profits and high risk aversion to currency holders

Moderately reducing the ETH position at this moment may be more in line with the strategy. After all, the above many positive factors are more likely to gradually emerge in the medium and long term, while ETH may continue to fluctuate or even weaken in the short term. The competitive landscape and value dilemma mentioned in the short argument are not problems that can be solved in one or two quarters.

At this time, you can consider reducing positions, retaining the bottom position and adjusting positions flexibly, and then raising bets after the ETH trend is clear. You can also moderate band operations to improve capital efficiency. A neutral strategy can consider retaining a portion of the bottom position (in order to prevent missing potential outbreaks), while using another portion of the funds to band or allocate other assets to hedge the opportunity cost of holding ETH.

3. Coin holders who care about short-term performance and certainty, or have doubts about Ethereum 's route

Moderate caution is also a wise choice. You can consider completing most positions in batches when rebounding, and continue to pay attention to key indicators of the Ethereum ecosystem (such as on-chain activity, etc.). If there are signs of significant improvement in the future fundamentals, or new narratives appear, adjust the positions in time.

Risk warning: The above is only for information sharing and is not for investment advice.