A widely followed cryptocurrency analyst warns that interest in the Ethereum (ETH) ecosystem is declining as interest shifts to Bitcoin (BTC).
In a new strategy session, DataDash host Nicholas Merten told his 510,000 YouTube subscribers that future cryptocurrency development will likely focus on Bitcoin, which could dampen Ethereum's future value.
“There is a very good opportunity for rotation, a cross-sectional rotation in altcoins from legacy operations like Ethereum and other EVM (Ethereum Virtual Machine) chains towards other different types of operations in the space. That could be alternative L1s (Layer 1), but it will be Also mainly Bitcoin related infrastructure.
Bitcoin is the focal point here. And if you want to create a programmable layer for Bitcoin, you can do so. There are programmable layers like that. There are heaps. There are a whole bunch of other plays out there, and lots of new EVM (Layer 2) compatible L2s for the Bitcoin network being built right now. “I think this shows a very big gap in Ethereum’s value proposition.”
The trader also says that there don't seem to be new developments in the ETH ecosystem that are generating much excitement.
“Ethereum seems like a heavyweight chain right now. There are no exciting new things that really interested me here, no new applications on Ethereum, and nothing that, for example, couldn't be deployed on dozens of other EVM chains that would steal the ecosystem's activity.” This is easily because they are more scalable, they have lower fees.
And… I think they're having just as much trouble because they're in almost the same situation as Ethereum. They do not have any ties to Bitcoin. They are seeing practically single-digit growth. If anything, they're declining in the liquidity of their stablecoins deposited on-chain, or whatever other kind of metrics we use, developer commitments, etc.
The trader says his analysis is supported by the fact that Ethereum is falling against Bitcoin (ETH/BTC).
“Ethereum is losing to Bitcoin. Its dollar value may rise, but the name of the game here in crypto is to either buy Bitcoin or buy into trades that help you consistently outperform Bitcoin as an asset. If not, why not just buy the king? Why not “We only buy the largest position in the market, which is the safest bet? Because Ethereum right now, for four months, has been below the 200 week (moving average). That's not a good sign to see.”
ETH/BTC is trading for 0.0512 BTC ($2,218) at the time of writing.
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