- The current Ethereum bull run has done a 180 from the last, fueled by institutions and digital dollars instead of meme coins and NFTs.
- Until very recently investors struggled to understand its purpose, and the network suffered from weak revenue and increasing competition from Solana.
- Despite Ethereum’s shortcomings, it still leads its competition in the most important factor for institutions: decentralization.
Ten years have passed since Ethereum’s founding, and despite the fact that its native ether coin has mainly suffered in the latter half of that time, the company’s future appears to be more promising than ever.
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Since stablecoins, the majority of which are issued on Ethereum, were included in the first-ever U.S. crypto law, ether has grown more appealing to institutions in recent weeks. Additionally, there was a surge of ether treasury firms and corporate entries, new leadership at the Ethereum foundation, and the successful June initial public offering (IPO) of Circle, the issuer of the second-largest stablecoin.
But until recently, it appeared that ether—better known by its ticker, ETH—was doomed. Institutional investors, for one, have trouble comprehending its goal. Ethereum’s story was more complicated, having been compared to a world computer, a web3 app store, digital silver, digital oil, ultrasound money, and more, but Bitcoin’s main story about digital gold was straightforward and easy to understand.
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After a significant technical update last year, its revenue also declined, and it had to contend with growing competition from Solana, which seeks to address Ethereum’s infamously high prices and sluggish speeds.
After a year or so, the ether ETFs were beginning to resemble zombie funds. Compared to bitcoin ETFS’s $36 billion in their first year of trading, they have accumulated roughly $9 billion in net inflows since launching, primarily due to the most recent spike. The coin’s situation worsened after risk assets were sold off in April.
The 2021 bull market, which saw the advent of decentralized finance, or DeFi, and NFTs, was when the price of Ethereum truly took off, reaching an all-time high close to $5,000. However, since the 2022 fall, it has had difficulty recovering completely and has not yet returned to those peaks. It is currently trading close to $4,000 this week, which is a technically and psychologically difficult resistance level for ETH investors.
According to Avichal Garg, a co-founder and general partner at Electric Capital, which has made significant investments in the Ethereum ecosystem for a long time, “ETH today is roughly where bitcoin was in January 2019 — that’s when bitcoin turned 10.” “It’s not surprising that it takes that long for people to comprehend this after ten years of uptime. Like bitcoin between 2019 and 2024, I believe ETH will have its institutional arc in the next four to five years.
The last 10 years
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Computer programmer Vitalik Buterin, an early supporter of bitcoin, came up with the concept for Ethereum. He thought the initial Bitcoin network was beneficial but acknowledged that it lacked the technological capacity to manage larger and more complex applications. Buterin and colleagues wrote a whitepaper outlining the cryptocurrency’s goals and applications, which was published in 2013. The network became live on July 30, 2015.
It has fueled cryptocurrency developments like tokenization, decentralized autonomous organizations, NFTs, and DeFi over the years. At one point, paying more for transaction fees than the actual NFT or DeFi trade—sometimes more than twice—was commonplace during the 2021 bull market.
It started out as a protocol that resembled the Bitcoin network. However, it went through a technical change in 2022 known as the Merge, which was intended to boost its processing power and enhance security while using less energy. Staking options, which enable investors to generate “yield,” or rewards, on their etherholdings, were also made available to them.
The next 10 years
The present euphoria surrounding Ethereum appears to have changed drastically from the last bull run, despite the market stocks appearing to be at all-time highs, the comeback of meme stocks, and the proliferation of cryptotreasury companies. The world’s largest institutions will tokenize dollars and other traditional assets in the future, replacing meme currencies and NFTs. They are embracing the reduced costs, quicker settlement times, more transparency about ownership and performance, programmable terms, and global reach of crypto technology due to a more favorable legal environment.
The “tokenization of every financial asset” is a significant milestone in “the technological revolution in the financial markets,” according to BlackRock CEO Larry Fink.
Ethereum continues to lead its competitors in the most crucial area despite its flaws.
“A maximally decentralized network was the North Star that Ethereum has adhered to since its inception,” stated Austin King, co-founder and CEO of Omni Network, a blockchain platform built on top of Ethereum. “As stablecoins and institutional interest is starting to grow, we really are seeing the value proposition of that extreme level of decentralization really showing once again.”
“So much of the value that this whole technology class is providing is about removing the need to rely on other parties,” he stated. “Solana is a fantastic network, but Ethereum’s decentralization is where it truly excels. Making sure you have a neutral platform that people can work on is what matters most if you are in charge of hundreds of billions or even trillions of dollars’ worth of assets.
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