The Development Prospects of the Ethereum Ecosystem | Q&A

1. Is the challenge and diversion from other public chains the main factor for Ethereum's decline? Has there ever been such a serious divergence between Ethereum and Bitcoin before?

I believe the main reasons for Ethereum's price decline can be attributed to two points:

First, there has been no significant innovation in applications within the Ethereum ecosystem during this market cycle.

Second, other blockchains have diverted attention from Ethereum through innovation or trending topics.

Regarding the first point, some readers may argue that Ethereum has seen innovations like re-staking and layer two scaling in this cycle; isn't that considered significant innovation?

In my view, these innovations are indeed innovations, but they are all infrastructure innovations rather than application-level innovations. Infrastructure innovations target a niche user base, while application-level innovations can reach a broad user base and trigger rapid ecosystem growth.

In the last bull market, the DeFi, NFT, and blockchain gaming sectors within the Ethereum ecosystem were very typical examples of application-level innovation. Especially NFTs, which attracted a large number of users into the Ethereum ecosystem almost without any barriers.

However, in this cycle, Ethereum has been lacking in that regard at least up to now.

As for the diversion of attention from Ethereum by other blockchains, the most typical examples are the rise of the Bitcoin ecosystem and the emergence of Solana meme coins.

The growth of these blockchain ecosystems has created a significant wealth effect in the short term, diverting a large number of users and trending topics away from the Ethereum ecosystem.

However, in the long run, I am not worried about these issues because I firmly believe in the creativity and vitality of the Ethereum ecosystem, and I am confident that Ethereum's price will not remain sluggish in the long term.

2. What positions are suitable for layout if one is still in cash?

At this position, if one is in cash but still wants to make some moves, I think it would be quite awkward, as it feels a bit like "stuck in between."

In this regard, my suggestion is:

Either continue to stay in cash and, regardless of what happens next, do not allow yourself to buy any coins, forcing yourself to calmly observe everything that happens next, and then reflect on what mistakes you made in this cycle and where your operations went wrong.

If you don't want to stay in cash, just buy Bitcoin and Ethereum, which is a relatively safe and controllable method. However, buying Bitcoin and Ethereum now, even when the bull market peaks, the returns are likely to be very limited. Therefore, it will be quite challenging to lock in profits with such operations.

3. Did Magic at 0.78 double recently and then drop to 0.6 again? Should I hold on? Also, is this drop related to the halving?

So far, I have never sold any of the coins I have been dollar-cost averaging into (including Magic), and I won't sell now either. I will continue to do as I have written multiple times in my articles: as long as their teams do not encounter major issues, I will patiently wait until the bull market arrives to cash them out.

As for whether this drop is related to the halving, I guess the reader is asking if this drop is the last significant drop before and after the halving?

If that is what the reader wants to know, I can only say that I cannot predict such fluctuations, but I can certainly handle these types of fluctuations.

Why?

Because according to my method, I will:

First, determine whether the market has entered a bull market.

If it has not entered a bull market, then I will continue to operate according to the strategy we set during the bear market.

If it has entered a bull market, then I will operate according to the selling strategy I set during the bull market.

The current situation, according to my standards, is that we have not yet entered a bull market, so I will continue to operate according to the strategy I set during the bear market: since Bitcoin and Ethereum have already surpassed the dollar-cost averaging price, I will no longer dollar-cost average into them. I will not buy any other coins I was dollar-cost averaging into either. Then, with the remaining funds, I will occasionally buy some coins that I like and find valuable.

So as long as we have pre-set operations that account for market fluctuations, when these fluctuations arrive, we can simply follow the established operations.