Why Ethereum is the Most Hated Yet Dominant Asset in the Crypto World!

I will share the reasons behind the criticism, the factors that haters don’t tell you, and how Ethereum’s fundamentals and technicals align on the charts. Stick around till the end, as I will also give my final conclusions.

1. Ethereum’s Economics and Consensus Mechanism:

   • Ethereum is a decentralized blockchain like Bitcoin. It’s sustained by miners and validators who secure the network and earn rewards through two major ways: block rewards and transaction fees.

   • Before the Merge Hard Fork, Ethereum’s transaction fees were mainly collected by Layer 1. Post-Merge, Layer 2 solutions like Arbitrum, Base, and Optimism began absorbing much of the transaction volume, reducing Ethereum’s direct earnings.

2. The Roll-Up Mistake:

   • Ethereum allowed Layer 2 roll-ups to flourish without much restriction. About 90% of the economic activity moved to these roll-ups, causing Ethereum to lose significant transaction fee revenue.

   • This was compared to “Canada giving away its resources to the US for cheap,” highlighting Ethereum’s loss of major business opportunities to side chains and L2 solutions.

3. Lack of Product Improvement:

   • While competitors like Solana focused on scaling efficiently, Ethereum’s Layer 1 remained slow and expensive. This strategic error allowed many users and projects to migrate to faster alternatives.

4. Strategic Selling by Ethereum Foundation:

   • The Ethereum Foundation sold ETH at critical market moments, causing major sell-offs. This was viewed as a questionable decision during pivotal market movements.

5. Institutional Adoption and Layer 2 Growth:

   • Despite criticisms, major institutions like Sony, Samsung, BlackRock, Coinbase, and Kraken are building on Ethereum, especially on its Layer 2 networks.

   • Coinbase’s “Base,” Kraken’s upcoming L2, and major decentralized exchanges like Uniswap are all choosing Ethereum as their core blockchain.

6. Ethereum vs. Solana TVL and Market Cap Comparison:

   • Ethereum still leads with a $60 billion TVL (Total Value Locked) compared to Solana’s $8.76 billion, indicating its dominance in DeFi despite Solana’s hype.

7. Future Predictions:

   • Technical analysis indicates Ethereum might push towards the $5,300 – $5,500 range in the next bullish cycle, with support levels around $2,100.

   • Institutional investments, new L2 rollouts, and potential rate cuts by the Federal Reserve could trigger Ethereum’s next massive rally.

Despite being labeled as the “most hated asset,” Ethereum’s contribution to the blockchain world is unmatched. From ICOs, DeFi, NFTs, to Metaverse projects, Ethereum has been the backbone of decentralized applications. As Layer 2 solutions continue to scale and major institutions bet on Ethereum, it still remains the “Digital Oil” powering Web3.