Bitwise’s chief investment officer, who is also the firm’s crypto asset manager, says that Ethereum has a high potential for growth.ETHAfter being outpaced both by Bitcoin (BTCSolana) (SOL).
In a new blog post, Bitwise executive Matt Hougan says Ethereum’s performance is being affected by the upcoming elections, risks, volume shifts, and a slower start for the ETH-based ETF, which has caused it to be outperformed SOL and BTC.
“The ETH/BTC ratio – a comparison of the price of Ethereum versus the price of Bitcoin – recently hit its lowest level in three years. On a year-to-date basis Ethereum is flat while Bitcoin is up 38%, and Ethereum’s top competitor, Solana, is up 31%.”
Hougan warns that the smart contracts platform leading the market could suffer if Kamala Harris is elected president. She would continue the harsh policies of the Biden Administration towards digital assets.
He continues to state that ETH faces technological challenges as well from younger, newer blockchains such as Solana which offer faster transaction speeds and lower fees. Hougan claims that the current trend in crypto is to be bullish about Solana, and bearish about ETH.
A second issue, according to the executive is the volume switching from Ethereum and layer-2 scaling solution built on it.
“The rise of Layer-2s has shifted so much volume away from Ethereum that its revenues are down to a four-year low. Many wonder if Ethereum has shot itself in the foot by scaling away from the foundational Layer-1 blockchain.”
Hougan claims that despite listing ETH as the top smart contract platform, none of its problems are apparent. “existential.”
Ethereum has more active developers and users than any other cryptocurrency, with a 5x larger market capitalization. It’s the only programmable blockchain that has a modicum of regulatory support in the U.S., with a booming regulated futures market and a multi-billion-dollar ETF market…
I’m sitting in my office and none of Ethereum’s challenges seems existential. Its opportunities seem to be brimming. As we approach the elections in November and regulatory clarifications, I think the market will reevaluate Ethereum. “For now, Ethereum looks like it could be a contrarian wager through to the end of this year.”
Ethereum trades at $2,302 as of the time this article was written, which is a drop of 3.4% in just 24 hours.
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