The recent surge in Ethereum’s price, crossing the $3,000 threshold, has grabbed the attention of the crypto community. However, amidst the celebrations, Fred Krueger, a prominent Bitcoin ETF expert, has raised doubts about the true value of ETH. Krueger, a Wall Street veteran, took to social media to express his skepticism, stating that “ETH is completely detached from reality.”
Krueger’s criticism is centered around the decreasing usage of the Ethereum blockchain. Despite the impressive price rally, he points out that the number of active daily users on the platform has dropped significantly. From 120K active daily users in 2021, the number has dwindled to just 66K in the past year. The top decentralized application, Uniswap V3, is only attracting 16K daily active users, a far cry from the figures in 2020.
Drawing parallels to meme coins like Shiba Inu, Krueger highlights Ethereum’s inflated market cap of $361 billion in relation to its diminishing utility and engagement. He describes Ethereum as becoming a type of meme coin itself, emphasizing the stark difference between its market cap and actual usage. Krueger argues that Ethereum is not just overvalued but faces tough competition from other blockchains that offer better transaction costs and speed.
Regulatory Concerns
Krueger also expresses concerns about the future regulatory landscape for Ethereum, particularly regarding the potential for an ETH exchange-traded fund (ETF). He doubts that the Securities and Exchange Commission chair, Gary Gensler, would approve such an ETF, considering the possible implications of allowing a token with a significant pre-mine to receive such approval. This presents a challenge for Ethereum in gaining mainstream financial acceptance.
The crypto community’s response to Krueger’s critique has been mixed. Some users defended Ethereum by pointing to the platform’s rollup-centric roadmap and argued against using mainnet daily active users as the sole metric for its health. However, Krueger remained unconvinced, maintaining his stance on Ethereum’s declining performance.
Krueger’s criticism of Ethereum extends to the broader landscape of cryptocurrencies, where he questions the long-term viability and value proposition of altcoins, including Layer 1 solutions other than Bitcoin. He asserts that platforms like Ethereum are unlikely to become significant value generators in the long term, emphasizing his belief in Bitcoin as the true revolutionary cryptocurrency.
Fred Krueger’s critical analysis of Ethereum raises valid concerns about the true value and utility of the platform. While the price surge may be exciting for investors, the declining usage and competition from other blockchains indicate potential challenges for Ethereum in the future. As the crypto market continues to evolve, it will be interesting to see how Ethereum addresses these issues and whether it can maintain its position as a leading blockchain platform.