Next month marks the 10th anniversary of Satoshi’s White Paper – which, in creating a “peer-to-peer electronic cash system” called Bitcoin, catalyzed a financial revolution in the same manner the assembly line catalyzed the industrial revolution; and the internet, the communications revolution. Yet, because he remains anonymous, Satoshi has not been deified in the manner of Vitalik Buterin, the 24-year old whiz kid who invented Ethereum…and still serves, on a de facto basis, as “CEO.”
Eighteen months ago, Ethereum was languishing at $10 – in no man’s land, languishing from the effects of the July 2016 hard fork that created Ethereum Classic. Then, the ICO bubble inflated, pushing ETH up to $380 in June – which, believe it or not, represented its all-time high versus Bitcoin, at nearly 15%. The reason being, that it occurred amidst the heart of the Bitcoin scaling debate – when BTC was falling, and ETH rising; thus, yielding calls for LOL, an Ethereum “flippening.”
By July, the ICO bubble had burst, causing ETH to plunge to $150; still a lofty valuation, at 8.5% of a BTC compared to 1% four months earlier. However, by late December, it had risen back to $425 – but because Bitcoin was EXPLODING; as “dominance” exploded, too; Ethereum fell below 2.5% of a BTC.
That’s when the fun started – as when Wall Street Crypto Hedge Funds launched in January, they “diversified” into altcoins with a vengeance. This, as the Mt Gox Trustee was dumping BTC, and BCash launching its most vicious Bitcoin raid yet. Consequently, the Ethereum platform was used to launch dozens of worthless ERC-20 tokens – pumping ETH to an all-time high of $1,400 in mid-January, or 11% of a BTC.
At its peak, Ethereum’s market cap was an astounding $135 billion, despite the fact it didn’t DO anything other than serve as an assembly line for pump-and-dump tokens and ICOs – the latter of which, in Ponzi-esque fashion, were typically funded with Ethereum. Yes, it was hyped as the “World Computer” – but the fact is, not only were “smart contracts” well before their time, but Bitcoin will ultimately be able to do them, too…in fact, right now, via RSK.
Investors LOVED Ethereum because they viewed it as a centralized, high-tech “crypto tech stock,”; with a young, charismatic founder who publicly hyped its potential…hob-knobbing with everyone from Wall Street bankers to Fortune 500 CEOs to Vladimir Putin.
Moreover, ETH was not marketed as a monetary substitute – like its “competitor” Bitcoin. Thus, it was socially acceptable to promote, and heavily invest in. Hence, its meteoric price rise, and calls for “flippenings” any time its price appreciation exceeded Bitcoin’s. The problem being, that as noted above, Ethereum didn’t DO anything proprietary or exceptional; and at $135 billion, was valued as if it would shortly be an asset class of its own!
Thus, when the crypto bear market commenced, Ethereum was hit hard – as aside from the 86% price plunge (and counting), mainstream financial and industrial institutions abandoned their faux interest. Moreover, ETH became as copied as BTC – with numerous “platform stocks” entering the fray, like EOS, Cardano, NEO, Lisk, and Waves; all of which, DO nothing…but claim to be superior. Not to mention, it’s bastard child, Ethereum Classic.
With the altcoin bubble bursting, “platforms” are being exposed for their lack of use case – let alone, relative to the 1,000-pound elephant they were trying to usurp…in turn, exposing said elephant for its limited value…which, at today’s $20 billion market cap, is STILL valued as a MAJOR technology company.
Vitalik may be a brilliant coder, but his public relation skills leave much to be desired. In other words, exactly what you’d expect from a 24-year old thrust into one of the world’s most high-profile corporate positions. Such as, repeatedly jabbing at Bitcoin – which has essentially no flaws; compared to Ethereum, which has many – some, potentially fatal.
Thus, it should be no surprise that he thrust his foot into his mouth today – when, at a conference, he admitted Ethereum’s dotcom-like halcyon days are over (as if anyone with half a brain didn’t know that already); whilst simultaneously, painting the same brush over the entire crypto sector. Which, amidst today’s altcoin bear market; and Bitcoin consolidation; catalyzed another crypto plunge - led by, as you can imagine, Ethereum.
To wit, he said the first seven years of cryptocurrency growth was “dependent on marketing and trying to get wider adoption,” but that “strategy is getting close to hitting a dead end." The reason being, "the blockchain space is getting to the point where there’s a ceiling in sight…as if you talk to the average educated person, they've probably heard of blockchain. Thus, there isn’t an opportunity for another 1,000-times growth in anything in the space anymore." Instead, the next growth phase will be “getting people who are already interested in cryptocurrencies to be involved in a more in-depth way."
To me, this is the ultimate hubris – as aside from his lack of PR savvy, he had the gall to put Ethereum in the same sentence as Bitcoin…reminding me of Lloyd Bentsen chastising an equally hubristic Dan Quayle, in saying “I knew Jack Kennedy – and Senator, you’re no Jack Kennedy.” While Vitalik was 100% correct that Ethereum’s “use case” has peaked, Bitcoin’s is just getting started.
https://twitter.com/Andy_Hoffman_CG/status/1038521505552850944
- Andy_Hoffman_CG
To that end, while the current crop of altcoins are suffering from the effects of the bear market – and “strategies” gone awry (in many cases, no strategy at all); plenty of successful crypto assets will emerge in the future, as the Digital Age matures.
https://twitter.com/fluidvoice/status/1038532383753084928
- fluidvoice
So, to those holding Ethereum at its current valuation of $20 billion, or 3.2% of a BTC, consider that these are still very lofty prices – at a time when the sector is under pressure, and its “CEO” casting shade on its own growth prospects.
As for Bitcoin, it’s a shame that it’s constantly under attack when “competitors” are exposed. But hey, that’s what it’s dealt with for the past decade. However, the fact remains that Bitcoin has nothing to do with Ethereum, and will continue to grow dramatically, no matter what false narratives are created, or how miserably “competitors” fail.