Ether’s (ETH) declining attraction as an funding comes from layer-2’s draining worth from the principle community and an absence of group pushback on extreme token creation, a crypto enterprise capitalist says.

“The #1 cause of this is greedy Eth L2s siphoning value from the L1 and the social consensus that excess token creation was A-OK,” Castle Island Ventures accomplice Nic Carter said in a March 28 X publish.

Ether “died by its own hand”

“ETH was buried in an avalanche of its own tokens. Died by its own hand,” Carter stated. He stated this in response to Lekker Capital founder Quinn Thompson’s declare that Ether is “completely dead” as an funding.

“A $225 billion market cap network that is seeing declines in transaction activity, user growth and fees/revenues. There is no investment case here. As a network with utility? Yes. As an investment? Absolutely not,” Thompson said in a March 28 X publish. 

The ETH/BTC ratio — which exhibits Ether’s relative energy in comparison with Bitcoin (BTC) — is sitting at 0.02260, its lowest stage in practically 5 years, according to TradingView information. 

At the time of publication, Ether is buying and selling at $1,894, down 5.34% over the previous seven days, according to CoinMarketCap information.

Meanwhile, Cointelegraph Magazine reported in September 2024 that fee revenue for Ethereum had “collapsed” by 99% over the earlier six months as “extractive L2s” absorbed all of the customers, transactions and payment income whereas contributing nothing to the bottom layer. 

Around the identical time, Cinneamhain Ventures accomplice Adam Cochran said Based Rollups might remedy the difficulty of Ethereum’s layer-2 networks pulling liquidity and income from the blockchain’s base layer.

Cochran stated Based Rollups might “directly impact the monetization of Ethereum by making a pretty fundamental change to incentive structures.”

Related: Ethereum futures premium hits 1+ year low — Is it time to buy the ETH bottom?

Despite optimism towards the tip of final yr about Ether reaching $10,000 in 2025 — particularly after reaching $4,000 in December, the identical month Bitcoin touched $100,000 for the primary time — it has since seen a pointy decline alongside the broader crypto market downturn.

Standard Chartered added to the bearish outlook via a March 17 client letter, which revised down their finish of 2025 ETH worth estimate from $10,000 to $4,000, a 60% discount. 

However, a number of crypto merchants, together with pseudonymous merchants Doctor Profit and Merlijn The Trader, are “insanely bullish” and argue that Ether could be the “best opportunity in the market.”

Magazine: Arbitrum co-founder skeptical of move to based and native rollups: Steven Goldfeder

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