Main Causes of Ethereum Investment Slump
Recently, along with the sharp decline in the New York Stock Exchange, Ethereum is being evaluated as having lost its investment value. Experts acknowledge the utility of the Ethereum network but analyze that unlimited token issuance and active Layer 2 expansion are 오히려 diminishing its investment appeal. In particular, the founder of a macro hedge fund said, "ETH is completely dead as an investment asset," showing a decline in all areas including trading volume, number of users, fees, and profits.
Price Decline and Selling Pressure within Centralized Exchanges
According to blockchain data, the supply of Ethereum within centralized exchanges (assets stored in exchanges) is steadily increasing, suggesting that whale selling is intensifying. Along with short-term price declines, investor confidence is further diminishing, which is causing anxiety in the overall financial market.
Rise of Competing Platforms and Layer 2 Solutions
As Layer 1 competing platforms such as Solana and Avalanche emerge, the Ethereum ecosystem is becoming increasingly decentralized. At the same time, Layer 2 solutions such as Arbitrum, Optimism, and Base, which emerged to complement Ethereum's scalability, are issuing their own tokens, resulting in a lower demand for ETH. As a result, Ethereum, which has transitioned from a deflationary model to an inflationary structure, is losing its appeal to investors.
Trends in the SEC and U.S. Stock Market, and Changes in Cryptocurrency Regulations
With the recent replacement of the SEC Chairman under the Trump administration, significant changes are expected in the U.S. stock market and financial regulatory environment. Former SEC Commissioner Atkins has stated that he will completely readjust the existing strong regulatory stance, and along with this, there is an urgent need to ease regulations and establish clear guidelines for the cryptocurrency market. These changes can have a significant impact on the cryptocurrency investment market, including Ethereum, so investors should closely examine financial, securities, blockchain, and economic situations.
Future Prospects and Investment Strategies
In order for Ethereum to regain trust as an investment asset, it must integrate its overly decentralized ecosystem and establish clear standards for token issuance and value distribution. In the medium to long term:
• Strengthening network utility and reorganizing investment logic
• Clarifying the division of roles with Layer 2 solutions
• Establishing market stabilization measures to curb whale selling
Such strategies seem necessary. In addition, the investment attractiveness of the entire cryptocurrency will be re-examined depending on how much the overall financial and securities market environment improves.
Based on expert analysis and market data, the Ethereum crisis is an important economic issue that can affect not only short-term investment losses but also the cryptocurrency market as a whole. Continuously monitoring the latest issues related to economics, investment, finance, securities, and blockchain will be of great help in future investment decisions.
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https://www.g-enews.com/article/Global-Biz/2025/03/2025033017254983774a01bf698f_1
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