Why is Ethereum (ETH) not meeting expectations and when can we expect the price to rise?

Why is Ethereum (ETH) not meeting expectations and when can we expect the price to rise?

Recently, questions about the future of Ethereum (ETH) have been raised against the backdrop of cryptocurrency performance. However, Bitwise's Chief Investment Officer, Matt Hougan, provides a positive outlook, even though the price of Ethereum has remained stagnant since the beginning of 2024. While Bitcoin (BTC) has seen 38% growth and Solana (SOL) has not kept up, Ethereum is struggling with a lack of investor interest.

Factors influencing Ethereum's poor performance

According to Hougan, Ethereum's underperformance is due to several factors. The first is the risks associated with the upcoming U.S. presidential election, which pose uncertainty in the market. While Bitcoin has already gone through regulatory hurdles, Ethereum remains under scrutiny as the Securities and Exchange Commission (SEC) considers it a security. This may lead to further challenges for Ethereum, especially if the current skeptical mood towards cryptocurrencies remains in the administration.

Another factor is the growing competition from other blockchains, such as Solana, which is increasingly establishing itself in the DeFi market. A number of projects are also struggling with the complexity of token economies and the failure of spot ETFs for Ethereum in the US to meet investor expectations.

Ethereum's strong fundamentals

Despite these challenges, however, Hougan stresses that Ethereum's fundamentals remain strong. ETH has significant market dominance in terms of stablecoin volume and is also home to more than 60% of all decentralized finance (DeFi) assets. The well-known prediction market Polymarket also runs on the Ethereum platform, confirming its usage and popularity.

Growth opportunities in the near future

Hougan believes that although Ethereum is facing current difficulties, the situation may change by the end of the year, especially considering the upcoming US elections. These events may open up new investment opportunities and stimulate interest in ETH, potentially leading to a rise in its price.

In conclusion, despite its current poor performance compared to Bitcoin and other altcoins, Ethereum still has potential. With renewed investment interest and strong fundamentals, the situation could improve significantly in the coming months.

*This is not investment advice.

Team Coingarage