Why The Ethereum Haters Are Stupid and Wrong

Many (stupid) people talked about Ethereum flipping Bitcoin’s market cap a few years ago. Today, I hear similar (stupid) murmurings about Solana flipping Ethereum’s market cap. Both groups (or maybe the same group?) are wrong. Solana isn’t going to flip Ethereum, just as Ethereum didn’t flip Bitcoin in the last bull cycle.

I’d argue that Ethereum is highly likely to outperform Solana for the remainder of this bull run. Writing these words feels heretical. Afterall, it tastes like Solana is getting shoved down my throat like a drink on a date with Bill Cosby. But I don’t like Solana. It’s getting attention and adoption as the shitcoin casino. Transactions fail and it’s constructed on a VC pyramid that has repeatedly punished ordinary crypto investors.

This article isn’t here just to shit on Solana (although I will keep doing this). Other L1s that were popular during the last cycle are even more embarrassing. Cardano is now officially vaporware, with Charles Hoskinson’s controversial political statements generating more attention than anything the chain has released. Polkadot is the little engine that couldn’t. And Polygon is going through its third rebrand when it should probably just rename the project Polymarket chain. Avalanche seems like a 60-year-old movie star who isn’t cool anymore but still thinks he is.

While Ethereum may continue suffering for a couple more months, I have strong reasons why it will return with a vengeance. In this article, I’ll explain why Ethereum is still the uncontested #2 crypto asset and offers a tremendous upside with much lower downside risk today than many other altcoins.

Reason #1: Fundamentals and Peak Bearishness

Fundamentally, Ethereum blows away any other Layer 1 ecosystem. With its Layer 2s, Ethereum has thousands of protocols built on top of it. More importantly, the protocols attract investment dollars. Take a look at the data below from DefiLlama:

I circled all the chains that use Ethereum as their gas token in green (with the exception of Polygon that uses Matic). I circled two highly valued metrics in red- Protocols and TVL (total value locked). Protocols are obvious because they reflect builders want to be on these chains indicating more creativity and room for improvement. TVL is important because it indicates that investors are confident having their funds on that specific chain. More importantly, much of the liquidity on these chains are paired with Ethereum locking more of the ETH token and improving its utility.

Solana only has 6% of the total value locked on chain whereas Ethereum and its Layer 2s have over 65% of total value locked. Yes, Solana may have more users, but would you rather own a flea market or a Nordstrom’s? Tron is mostly used for Justin Sun and cheap stablecoin transfers in Asia and Binance Smart Chain is losing relevance that will be hard to regain with CZ behind bars.

As an admitted contrarian (when convenient), it seems that Ethereum is at peak bearishness. We just had a massive liquidation event by Jump crypto on a Sunday (smells fishy) that absolutely rekt the entire ETH ecosystem. The ETH ETF just launched and Grayscale has to dump all of its Ethereum and everyone has a huge hard-on for Solana so its p’s pretty easy to convince people to move their ETH to SOL. It’s interesting because ETH is 47% below its all-time high, and SOL is 41% below its all-time high, but based on current sentiment, you’d think SOL is trading above all-time highs.

Could more bad news about ETH come out? Certainly. But considering a 20% drop just occurred on a weekend, I believe the capitulation has occurred and the max pain has already arrived.

Reason #2: BlackRock

A Bitcoin ETF was denied for a decade. Then BlackRock filed for an BTC ETF and it was granted within 1 year. Shortly thereafter, BlackRock filed for an ETH ETF and it was approved within 1 year as well. I think we can safely say that Larry Fink has significantly more influence and power than the head of the SEC who has been repeatedly getting his ass handed to himself in all things related to crypto.

BlackRock has made it clear they are choosing Ethereum as their pony. Would I rather have my money following influencers and VCs (in Solana) or with the company who unilaterally owns 7% of the entire US economy?

BlackRock has made it clear they aren’t pursuing a Solana ETF. While I believe SOL may get a pump from investors believing a Solana ETF is coming, I’m hesitant to bet on it, especially with a flailing Donald Trump candidacy.

Nearly everyone was wrong with their estimates about BTC inflows to the ETF. What if they are equally wrong about ETH inflows? Ethereum bears and stupid talking heads say that it’s easy to pitch BTC and hard to pitch ETH. But, to quote Joe Biden, “that’s a bunch of malarkey.” Wall Street and ordinary people may be dumb, but they aren’t complete idiots.

BTC=digital gold. The internet of crypto. It’s that simple. Just as websites and applications are built on the internet, Ethereum is the bedrock for decentralized applications and websites.

I just provided the pitch to Wall Street. Bitcoin is digital gold, and Ethereum is the Internet of Crypto. There’s no reason to complicate things.

Reason #3: Real World Assets

Real World Assets are the new holy grail use case for crypto. And unlike past narratives such as the metaverse, gaming, and digital art NFTs, Real World Assets are an obvious use case for crypto.

We are already seeing gigantic adoption from a Real World Asset- stablecoins. Stablecoin transactions are nearing credit card transactions. The only regulations that have made any progress in the US government pertain to stablecoins.

Next, we are seeing US Treasuries being tokenized. Real estate, businesses, collectibles, securities, and other items that may not exist today will experience tremendous benefits by being tokenized- nearly instant settlement, a global market, collateral markets, 24/7 trading, and fractionalized.

This concept ties in with BlackRock. BlackRock has stated they want tokenization and the obvious chain they will choose for tokenization is Ethereum. Solana is too new and fragile in its current state for Real World Assets. Meanwhile, Ethereum is secure and has a long track record of functioning.

If Ethereum becomes the cornerstone for Real World Assets, other chains will have to fight for the leftovers. Solana may be the shitcoin casino. Another chain may focus on gaming and a different one on NFTs. But the lions share of commerce will be done on Ethereum and that is the biggest potential game changer.

Key Takeaways

I recently got smoked by going short on Ethereum before the ETF surprise news announcement. I will not make that mistake again. Ethereum has been ordained as the #2 crypto by BlackRock. Take advantage of owning the most fundamentally powerful altcoin while it’s getting kicked on the ground.

The Solana hype is real. But remember that Solana’s ascendance came at the hands of crypto’s most corrupt villain, Sam Bankman-Fried. Then retail got skewered again when the bankruptcy court stole their Solana for $15 and sold it to investment firms for $64 when it was valued at over $150. As these tokens unlock, don’t be surprised if retail gets shit on again by these investment firms.

I’m not saying ETH is perfect and doesn’t have its issues. It’s slow, clunky, and not distributed well. However, buying it now seems like a great risk/reward opportunity. I’d rather let the haters hate and scoop up the cheap ETH selling at a discount.

ETH is trading for $2600 as I write this. Clap if you think it’s a good value. If you disagree or are a hater, share your thoughts in the responses.

I own Ethereum and Ethereum ETFs. This information should not be taken as investment advice. I am no more qualified to give financial advice than to fry Cannolis for a neighborhood bake sale. Digital assets like crypto and NFTs involve risk, so you should always perform due diligence before investing.

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