The recent surge in the price of Ethereum (ETH) has attracted significant attention, with the token crossing the $3,000 threshold for the first time since April 2022. While this milestone has been met with celebratory reactions in the crypto community, financial expert Fred Krueger has cast doubt on the true valuation of ETH. Krueger, a Wall Street veteran and Bitcoin ETF expert, took to social media to express his skepticism about the current state of Ethereum’s market valuation, stating that “ETH is completely detached from reality.”
Krueger highlighted a concerning trend in the usage of the Ethereum blockchain, pointing out that despite the soaring price of ETH, the platform has experienced a decline in daily active users. He noted that the number of active daily users on the Ethereum chain has dropped from 120K in 2021 to just 66K over the past year. The top decentralized application (dApp) on Ethereum, Uniswap V3, is only seeing 16K daily active users, a significant drop from the 60K users it had in 2020.
Drawing parallels to meme coins like Shiba Inu, Krueger criticized Ethereum’s inflated market cap, which currently stands at $361 billion. He argued that despite the high market cap, Ethereum’s direct utility and user engagement are diminishing, making it resemble a meme coin rather than a legitimate digital asset. Krueger pointed out that Ethereum faces stiff competition from other blockchains that offer better transaction costs and faster speeds for users.
In addition to questioning Ethereum’s current valuation, Krueger also expressed skepticism about the platform’s future regulatory landscape, particularly in relation to the potential for an ETH exchange-traded fund (ETF). He doubted that regulatory bodies, such as the Securities and Exchange Commission (SEC), would approve an ETH ETF, citing concerns about setting a precedent for massive pre-mines in the crypto industry.
Krueger’s critical assessment of Ethereum’s valuation and overall market position received mixed reactions from the crypto community. Some users defended Ethereum by pointing to its roadmap focused on layer-two scalability solutions and suggesting that daily active users on the mainnet may not accurately reflect the health of the platform. However, Krueger remained unconvinced, asserting that even layer-two solutions like Arbitrum have been in decline over the past year.
Krueger’s critique of Ethereum extends to the broader crypto market, where he questions the long-term viability and value proposition of altcoins, including other layer-one solutions apart from Bitcoin. He firmly believes that Bitcoin is the true revolutionary cryptocurrency and the only digital asset with a clear and sustainable value proposition. Krueger emphasizes his lack of interest in speculative DeFi activities and asserts that all other cryptocurrencies are fighting for much smaller use cases compared to Bitcoin.
Fred Krueger’s analysis of Ethereum’s valuation and the broader crypto market underscores his belief in Bitcoin as the dominant and revolutionary currency. He criticizes Ethereum for being detached from reality, citing a decline in daily active users and increased competition from other blockchains. While the crypto community may have mixed reactions to Krueger’s assessment, his focus on the unique value proposition of Bitcoin as a decentralized and finite currency system remains unwavering. As Ethereum continues to navigate regulatory challenges and competition from other blockchains, its true value and market position may face further scrutiny in the coming months.