According to Cointelegraph, Ether (ETH) is experiencing a decline in its appeal as an investment, attributed to the impact of layer-2 solutions siphoning value from the main Ethereum network and a lack of community resistance to excessive token creation. Nic Carter, a partner at Castle Island Ventures, highlighted these issues in a March 28 post, stating that the primary cause is the "greedy Eth L2s siphoning value from the L1 and the social consensus that excess token creation was A-OK."
Carter's comments were in response to Lekker Capital founder Quinn Thompson, who claimed that Ether is "completely dead" as an investment. Thompson pointed out that Ethereum, with a market cap of $225 billion, is witnessing declines in transaction activity, user growth, and fees, making it unattractive as an investment despite its utility as a network. The ETH/BTC ratio, which measures Ether's strength relative to Bitcoin, has reached its lowest level in nearly five years, standing at 0.02260. As of the time of publication, Ether is trading at $1,894, marking a 5.34% decrease over the past week and a 17.94% drop over the past month.
Cointelegraph Magazine reported in September 2024 that Ethereum's fee revenue had plummeted by 99% over the previous six months due to "extractive L2s" absorbing users, transactions, and fee revenue without contributing to the base layer. Adam Cochran, a partner at Cinneamhain Ventures, suggested that Based Rollups could address the issue by altering incentive structures to benefit Ethereum's monetization. Despite previous optimism about Ether reaching $10,000 in 2025, especially after hitting $4,000 in December when Bitcoin reached $100,000 for the first time, Ether has faced a sharp decline amid a broader crypto market downturn.
Standard Chartered contributed to the bearish sentiment with a March 17 client letter, revising their end-of-2025 ETH price estimate from $10,000 to $4,000, a 60% reduction. However, some crypto traders, including Doctor Profit and Merlijn The Trader, remain optimistic, arguing that Ether could present the "best opportunity in the market."
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