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You may have heard by now that ETH is a cursed asset. Doomed to fail.
You may have read tweets saying that Ethereum is destined to go the way of Intel – a stock whose value has collapsed by two-thirds over the past five years while competitors (Nvidia and AMD) have thrived in comparison.
It is a method that only works if you focus only on the price and ignore the amount of activity It continues on Ethereum And for her surrounding Layer 2 and Layer 3 network.
Ethereum's value has risen just 30% in the past year, while the value of its direct competitor, SOL, has nearly doubled.
Even XRP has easily beaten ETH in the bull market so far. The price of XRP is now up more than 600% since hitting the bottom of the last bear market in November 2022.
Otherwise, BTC gained about 500% and SOL about 1500%. ETH looks dreadfully boring in comparison.
Here's an alternative theory: The relative overperformance of coins like SOL and XRP has nothing to do with ETH.
Let's start with XRP. Ripple Labs' ongoing struggle with the SEC (which began in December 2020) has sidelined XRP for almost the entire market cycle, not to mention its underperformance during the 2021 bull run.
So, whatever gains XRP has made in light of Trump's victory in November, it has more to do with catching up with the market than anything particularly special about the asset itself.
As for SOL, it's worth looking back to see what the top end of cryptocurrencies has looked like over the years.
Overall, the top three currencies have remained more or less the same since then 2016: BTC, ETH, then XRP.
in 2017Next in value are Litecoin (LTC) and Monero (XMR). These were, in addition to Bitcoin Cash (BCH) and Cardano (ADA). 2018; Eos in 2019; BNB in 2020.
LTC is now ranked 27th – much lower in the market – while Monero is 37th and Bitcoin Cash is 23rd.
Compare the chart above with the first chart, which maps price performance only. It tracks the market cap of the top end of the market – and shows how small all of these coins are relative to ETH.
It is normal for them to outperform ETH in certain parts of the cycle. While liquidity does not necessarily correspond to market capitalization, smaller assets generally need much less new capital to move the needle that far.
It is also no coincidence that LTC, XMR, and BCH, all alternatives to Bitcoin, have fallen significantly between cycles.
Bitcoin has won the race as a store of value and stablecoins have emerged to meet the digital payments use case better than Litecoin.
Whatever the mind and market share, the major coins from last year – those that didn't find a product-market fit on a large scale – may have simply been moved to Solana.
So Solana's rise has less to do with the expected demise of Ethereum and more to do with the diminishing importance of legacy currencies.
As for whether Ethereum will also become one of those “very old currencies” at some point, waiving that concern requires a completely different approach. Let me get back to you.
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