A widely followed crypto analyst is warning that interest in the Ethereum (ETH) ecosystem is declining as attention shifts to Bitcoin (BTC).
In a new strategy session, Nicholas Merten, the host of DataDash, tells his 510,000 YouTube subscribers that future crypto development will likely focus on Bitcoin, which may diminish Ethereum’s future value.
“There’s a very good chance of a rotation, a sector rotation in altcoins from legacy plays like Ethereum and other EVM (Ethereum Virtual Machine) chains towards other different types of plays in the space. That can be alternative L1s (layer-1s), but it also is mainly going to be Bitcoin-related infrastructure.
Bitcoin is the focal point here. And if you want to build a programmable layer for Bitcoin, you can do that. There are programmable layers like that. There’s Stacks. There’s a whole range of other plays out there, a lot of new EVM-compatible L2s (layer-2s) for the Bitcoin network that are being built right now. And I think this showcases a very big hole in Ethereum’s value proposition.”
The trader also says that there don’t appear to be new developments in the ETH ecosystem generating much excitement.
“It does feel like Ethereum is like a deadweight chain right now. No new exciting things that have gotten me really juiced up here, no new applications on Ethereum, nothing, for example, that couldn’t be deployed on a dozen other EVM chains that will easily steal that ecosystem activity because they’re much more scalable, they have lower fees.
And… I think that they’re in just as much trouble because they suffer from almost the same position that Ethereum is in. They don’t have any ties to Bitcoin. They’re seeing practically zero single-digit growth. If anything, they’re declining in their stablecoin liquidity deposited on the chain, or any other kind of metrics that we utilize, developer commits, etc.”
The trader says his analysis is supported by the fact that Ethereum is declining against Bitcoin (ETH/BTC).
“Ethereum is losing out against Bitcoin. It might be going up in dollar terms, but the name of the game here in crypto is you either buy Bitcoin or you buy into plays that are consistently helping you to outperform Bitcoin as an asset. If you’re not, why not just buy the king? Why not just buy the largest position in the market, the safest bet? Because Ethereum right now, for four months, has been below the 200-week (moving average). This is not a good sign to see.”
ETH/BTC is trading for 0.0512 BTC ($2,218) at time of writing.
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