The Dilemma of Ethereum: The Game Between Technological Upgrades and Value Loss

Recently, the ETH/BTC ratio has reached a five-year low, sparking widespread discussion in the market about the future development of Ethereum. This article will objectively analyze the viewpoints of both bullish and bearish factions, exploring the challenges and opportunities currently facing Ethereum.

1. Arguments from the Bullish Camp

1. The Ethereum ecosystem is solid: In emerging trends such as stablecoins, tokenization, and AI Agents, Ethereum still holds a dominant position.

2. Continuous progress in technical upgrades: The upcoming Prague/Electra upgrade is expected to further enhance performance, reduce Gas fees, and attract users back.

3. Ecological structure adjustment: Ethereum is shifting from a technology-driven to a capital and ecology-driven development path, laying the foundation for long-term development.

4. Undervalued Opportunities: Some analysts believe that ETH is currently undervalued by the market, with significant upside potential.

5. Macroeconomic liquidity factors: The overall market has not yet entered the "easing cycle," and the stagnation of ETH prices may be related to this.

6. Bull Market Rotation Potential: ETH has the potential to move from the periphery back to the center, combined with expectations of interest rate cuts and ETF progress, the future looks promising.

7. TVL Advantages: Ethereum's TVL ranks first, accounting for more than half of the entire DeFi market, demonstrating its advantage in "on-chain savings".

8. Inflation Rate Advantage: The annual issuance rate of ETH is only 0.5%, which is lower than BTC's 0.83%, making the currency model more sustainable.

9. Leading Developer Ecosystem: Ethereum has 65% of the global on-chain developer innovation activity, with over 6,200 active developers each month.

10. Governance Structure Reform: The restructuring of the foundation is expected to improve the efficiency of technical decision-making, enhance transparency, and strengthen long-term certainty.

2. Views of the Bearish Camp

1. Institutional wait-and-see attitude: Some analysts believe that core institutions have not yet entered the market on a large scale and may still be waiting for lower prices.

2. Ecological growth is weak: On-chain data is declining, traditional sectors are stagnant, and new hotspots have low correlation with ETH.

3. RWA narrative disillusionment: The ability of Ethereum to support global-level RWA is questioned, and the weak coin price affects its credibility as a underlying layer.

4. User growth slows down: The mainnet user growth has stagnated, and new users tend to choose L2 or other public chains.

5. Supply inflation: The decline in network transaction fees has led to a decrease in the amount burned, resulting in a growth trend in ETH supply.

6. The ETH/BTC ratio weakens: The exchange rate of Ether to BTC has hit a five-year low, reflecting a decline in market confidence.

7. Increased competition: New public chains like Solana are emerging, attracting a large number of incremental users and developers.

8. Technical Route Controversy: Some viewpoints suggest that the current technical route may not be conducive to capturing the value of the token.

9. Core application outflow risk: Important applications consider launching independent chains, which may lead to transaction fee losses and ecological siphoning.

10. Governance Trust Challenges: Rumors of high-level cashing out by the foundation have sparked controversy, undermining the community's confidence in future development.

11. Route Divergence: There is a divergence in the degree of dependence between the mainnet and L2, and the overall strategic direction is unclear.

3. Investor Decision Recommendations

Based on the above analysis, different types of investors may consider the following strategies:

1. Long-term value investors: If you believe in the infrastructure position and technological evolution potential of ETH, consider holding or gradually increasing your position, waiting for the next cycle.

2. Medium to short-term investors: You may moderately reduce your ETH position, maintain your base position, and flexibly adjust your holdings, paying attention to market trend changes.

3. Investors who focus on short-term certainty: They can reduce their positions in batches during the rebound, continuously monitor key ecological indicators, and consider entering the market again when there is an improvement in fundamentals or a new narrative emerges.

It is important to emphasize that the cryptocurrency market carries high risks, and investors should make decisions based on their own risk tolerance and investment objectives. The above content is for reference only and does not constitute investment advice.