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The Weekly Shift gives you actionable insights into the crypto market without the BS.
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Long considered a staple of the crypto ecosystem, ETH’s status in the market is coming under attack. We dive into why calls for Ethereum’s death are exaggerated and premature. 👇
Ethereum Continues To Struggle
ETH has fallen by 40% since its March highs. And over the past year, ETH is down 33% against BTC (i.e. ETH/BTC).
It has also badly underperformed SOL, with the SOL/ETH pair +374% over the past year.
In the last 30 days, ETH has continued to underperform most sectors.
In terms of sentiment, it has not felt this bad in years. Data from Kaito supports this (credit:Â @LeonWaidmann).
Another sign of the rising levels of impatience and negativity is the fact the Ethereum Foundation (EF) came under attack for the lack of transparency over its $100M yearly budget.
But Why?
There are several reasons why ETH sentiment is so bad right now.
Most recently, the recently launched spot ETFs have so far been underwhelming, with ~$560M in net outflows after the first month.
Also, with the momentum currently with the Solana ecosystem, many things in Ethereum land appear worse in comparison.
More concerningly, with Ethereum continue to execute on its rollup-centric roadmap, it has expectedly slashed overall revenue and resulted in less ETH being burned than everyone was used to only a year ago.
Why It Might Be Overblown
Calls for an Ethereum death could be premature, as Ethereum still leads in a lot of categories:
- Strong network effects through the EVM.
- Easily the largest developer ecosystem.
- Big names like Coinbase, Sony, and BlackRock are building and deploying in the Ethereum ecosystem.
- Leading across core metrics such as total value locked (TVL), stablecoins and real-world assets (RWAs).
- Ethereum remains the most battle-tested smart contract platform, with 100% uptime.
For now, Ethereum is still one of the most widely used and supported crypto ecosystems.
Zoom Out
It can be worth stepping back and asking, “exactly what assets is ETH underperforming and what is this negative sentiment based on?”
In our opinion, ETH sentiment is only down when compared with BTC, SOL and a few selected memecoins over the last year.
Don’t Rule Out ETH Just Yet
Just as Solana was a contrarian bet some 18 months ago, it now feels contrarian to be optimistic about Ethereum and ETH’s future.
Ethereum is far from dead and still leads across several key metrics. Things would have to get much, much worse before it was fair to put a line through Ethereum.
Click below for our weekly wrap-up (or click here)!
Macro drags down crypto again
What happened? Global stock markets started the week in the red due to weaker-than-expected U.S. economic data and the Bank of Japan hinting at additional rate hikes. BTC briefly fell to $55,500, its lowest since Aug. 8, to reverse nearly all gains in the past month.
Why does it matter to you? Last month’s sell-off raised concerns that Japan’s carry-trade problem, which crushed global markets, is not over.
Wells Fargo set to pitch Bitcoin ETFs to customers
What happened? The asset manager, which managed $1.7T worth of assets, is reportedly set to begin actively pitching spot Bitcoin ETFs to its clients in September.
Why does it matter to you? Demand for these products should only keep growing as more asset managers start to actively offer them to clients—something that most are not yet doing.
Qatar introduces regulatory framework for digital assets
What happened? The rules include tokenisation processes and the legal recognition of property rights for tokens and smart contracts.
Why does it matter to you? Regulation is critical to growing crypto adoption and shows strong willingness by Middle Eastern countries to become more crypto-friendly. All eyes now turn to the U.S, which is yet to properly regulate the industry.
🟥 On Our Radar: Red Flags With Trump DeFi Protocol
The Donald Trump-connected crypto project World Liberty Financial was revealed to be primarily forked from previous DeFi protocol Dough Finance, which suffered a $1.8M attack in July.
- Aave and Sky (formerly Maker) announced an ongoing collaboration, starting with an incentive program to boost USDS adoption.
- ZKsync Era builder Matter Labs cut 16% of its workforce.
- Solana transactions hit a multi-month low in August.
- Cardano launched the first phase of its ‘Chang’ upgrade, moving control to the community and turning ADA into a governance token.
- Polygon has upgraded its MATIC token to POL, increasing token utility while introducing a 2% emissions schedule.
- Arbitrum launched its Stylus upgrade, making building on the network more accessible for web2 developers.
- Ethena partnered with EigenLayer and Ether.fi to allow USDe to be restaked.
- Ripple announced plans to add Ethereum-compatible smart contracts to the XRP Ledger.
â–¶ Checkmate’s Onchain Analysis:
â–¶ Ben: Maple I Got Right, Polygon I Got Wrong
â–¶ Nick: Why Illuvium (ILV) Has Disappointed
â–¶ Victor: Pro-Crypto Combo Arrives: Rate Cuts & Improving Liquidity
â–¶ The Shift List Update: One Upgrade, Four Downgrades
In case you missed it:
â–¶ Simon: What Selling the Top Looks Like
▶ Monthly Livestream: Strengthening Market Outlook & Knowing When To Sell
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We hope you’ve enjoyed it, and look forward to seeing you next week!
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