Last weekend Quinn Thompson, Chief Investment Officer at Hedgefonds Lekker Capital, caused a lot of turmoil in the crypto world. In a sharp message on X he called Ethereum (ETH) “completely dead” as an investment.
His statement led to a storm of reactions in the community. Both supporters and opponents were heard fiercely, which resulted in an intense debate about the future and value of Ethereum.
“ETH as an investment is completely dead”
Thompson bases his position on what he sees as fundamental economic weaknesses of the Ethereum network. Despite a market capitalization of more than $ 225 billion, he points to falling figures in user growth, transactions and revenues from reimbursements. According to him, there is “no investment argument” for ETH anymore:
“Make no mistake, ETH as an investment is completely dead. A network with a market capitalization of $ 225 billion that shows a decrease in transactions, user growth and income/reimbursements. There is no investment argument here. As a network with application? Yes. Absolutely not.”
Layer 2 as a cause of value stuff
Thompson blames the deteriorated investment case from ETH, partly on the rise of Layer 2 solutions (L2s), which, according to him, remove value from the main network. The increase in tokens within the ecosystem would also have fragmented the value. Nic Carter, partner at Castle Island Ventures, joined sharp words:
“Eth was buried under an avalanche of his own tokens. Suicide.”
Experts defend Ethereum
Thompson’s sharp analysis did not remain without a counter -reaction. Professor Omid Malekan from Columbia Business School recorded it for the Layer 2 networks. According to him, these solutions are crucial for the scalability of Ethereum, and it makes perfect sense that they attract part of the value:
“Security is not free.”
Scott Johnsson from VB Capital also served Thompson from reply. He pointed to Ethereum’s unique token structure with a deflatio combustion mechanism as an economic force:
“If the consumption of ETH looks like that of oil, then it is much more likely that the price of ETH is retaining value.”
Ethereum’s future
Although virtually nobody doubts the technological relevance of Ethereum, the debate about the investment value of the ETH token is going on. Where Ethereum was once the undisputed king of the Defi world, the network is now struggling with fierce competition from other block chains. In this new reality, Ethereum seems to have difficulty holding its economic position.
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Source: https://newsbit.nl/topinvesteerder-quinn-thompson-noemt-ethereum-volledig-dood/
