Ethereum's investment appeal has hit a five-year low against Bitcoin, with venture capitalists pointing fingers at layer-2 networks for draining value from the main blockchain.
Castle Island Ventures partner Nic Carter claims that "greedy" Ethereum L2s are the primary culprit behind ETH's declining performance, along with the community's acceptance of excessive token creation.
"ETH was buried in an avalanche of its own tokens. Died by its own hand," Carter stated on X (formerly Twitter), responding to Lekker Capital founder Quinn Thompson's assessment that Ethereum is "completely dead" as an investment.
Thompson highlighted concerning metrics, noting that despite a $225 billion market cap, the network faces declining transaction activity, user growth, and revenue. While acknowledging Ethereum's utility, he firmly rejected its investment potential.
The ETH/BTC ratio has dropped to 0.02260, marking its lowest point since 2019. Ethereum currently trades at $1,894, showing a 5.34% weekly decline and a steeper 17.94% monthly drop.
The situation echoes concerns raised in September 2024, when Ethereum's fee revenue reportedly plunged 99% over six months as layer-2 solutions absorbed user activity while offering minimal value to the base layer.
Standard Chartered recently adjusted their ETH price forecast, slashing expectations from $10,000 to $4,000 for end-2025. However, some traders remain optimistic, with notable figures like Doctor Profit and Merlijn The Trader suggesting Ethereum could present the market's best opportunity.
The debate continues as the crypto community grapples with Ethereum's future prospects amid growing layer-2 dominance and market uncertainties.