Ethereum (ETH) Faces Doubts About Its Future as an Investment

Ethereum (ETH) is facing doubts about its future as an investment, with Lekker Capital founder Quinn Thompson going as far as calling it “completely dead.”

The cryptocurrency market has been a hot topic of conversation lately, especially with the recent downturn in prices. Among the coins that are facing doubts about its future as an investment is Ethereum.

Lekker Capital founder Quinn Thompson went as far as calling it “completely dead.” He pointed to Ethereum’s falling transaction activity, weak user growth, and declining revenues as major red flags.

“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 stated in a March 28 post on X.

This struggles come after previous predictions of a $10,000 price target by 2025 and a few months ago, ETH reached $4,000 in December, the same time Bitcoin hit $100,000 for the first time.

However, the broader crypto market downturn has since taken a toll, dragging Ether’s price down. At the time of writing, Ethereum is trading at $1,883.81, reflecting a 1.88% drop in the past 24 hours and a 5.17% decline over the last seven days, according to CoinMarketCap.

This downward trend has sparked concern among analysts and investors, especially with Castle Island Ventures partner Nic Carter blaming the downfall on layer-2 networks, which he says are "siphoning value" from the main blockchain.

"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. Eth was buried in an avalanche of its own tokens. Died by its own hand," Carter stated in a recent X post.

The greed of L2s in siphoning value from L1s and the collective decision that we could mint an infinite supply of tokens to fund projects may have also contributed to this downfall.

— Nic Carter (@NicCarter_) March 28, 2024

The criticism continues as he pointed out that the downfall was self-inflicted by Ethereum due to the creation of an "excessive amount of tokens."

"We decided we could mint an infinite supply of tokens to fund projects, which in retrospect seems like a strange choice. But anyway, the brisk demand for an object of beauty, utility, and scarcity—and perhaps the last best hope for a sound monetary system—has come to an abrupt end," Carter added.

Furthermore, Standard Chartered has adjusted its price forecast for Ether, slashing its end-of-2025 prediction from $10,000 to $4,000—a sharp 60% reduction. This revision underscores the growing uncertainty surrounding Ether’s ability to recover.

As for trader Crypto Bull X, he sees an even bleaker scenario, claiming Ethereum looks "absolutely dead." According to the trader, the support levels are broken, the ETH/Bitcoin chart is weak, and the failure to hold the key moving averages showcases an extended downtrend.

"It looks like 2025 may be the final year for ETH as a top-2 crypto. Since 2016, it has held this position, being the 'crypto silver' and the driver of altseason," the trader added.

While some traders are fearing that Ether’s position is slipping, others argue that this downturn is temporary and an historical buying opportunity.

CryptoELITES, a trader bullish on Bitcoin, believes that this is a historic buying opportunity. According to the trader, the recent price action around $1,913 signals the “bottom.”

According to his analysis, this move completes a rounded-bottom pattern that could set the stage for a powerful parabolic rally. According to CryptoELITES, if the price manages to break through the key resistance zones at $4,000 and $5,000—levels that have posed difficulties for ETH in the past—the next targets are set at $7,000, $9,500, and $12,000.

If this rally continues, the trader says that the final resistance to break would be at $15,000—an apex that could lead to a 7x surge from current price levels.