Ethereum, don't let newcomers down
The whale rushed out, while the newcomers were still shouting at the door, "ETH to the moon."Author: Fairy, ChainCatcher
Editor: TB, ChainCatcher
Every cycle of bull and bear markets always brings a wave of curious new faces. In their eyes, Ethereum is often seen as an important threshold into the crypto world—technologically advanced, ecologically mature, and with a solid industry position.
But is reality really that beautiful?
On one side is the trust that newcomers have in Ethereum, and on the other is the market's ruthless indifference. After communicating with several university students majoring in blockchain, we found that there may be a disconnect between their expectations and the current state of ETH.
Are these hopeful newcomers the builders of the future, or are they ultimately just transient visitors who will be ruthlessly eliminated by the market?
Ethereum from the Perspective of Newcomers: Trust, Technology, and Understanding
Tu Si
A freshman student majoring in blockchain, completely new to the field, has not yet engaged in cryptocurrency or contract trading.
Tu Si has not entered the market yet, as he believes his knowledge is insufficient and does not dare to invest recklessly. However, when discussing Ethereum, he expressed a natural sense of trust in it, considering it a leading project and relatively authoritative.
When asked if he would consider buying ETH in the future, he said he would think about it, as he believes the risk of ETH appears to be smaller compared to other cryptocurrencies.
Lucien
A senior student majoring in blockchain engineering, primarily focused on smart contract development and has limited knowledge of the market. ETH accounts for 20% of his cryptocurrency spot investments. Overall, he is optimistic about Ethereum.
Lucien stated that from his understanding, Ethereum's technology is evolving, and its development is driving the industry's growth. For example, the recent upgrade of Ethereum significantly reduced gas fees on the chain, lowering user interaction costs. Additionally, the improvements from the Cancun upgrade are more developer-friendly, such as the new opcode in EIP1153 becoming an important component of Uniswap V4.
However, he also pointed out that Ethereum's framework is relatively mature, and current improvements are mainly optimizations, so the growth rate is somewhat limited.
Vernon
Graduated nearly a year ago with a focus on meme coins and contract trading, preferring short-term operations.
Among all crypto assets, ETH is the only large-cap coin that Vernon has invested in, primarily for wealth management and risk diversification. When discussing his choice of ETH, he mentioned that he bought it when the price had dropped significantly, and this cycle had not yet broken through historical highs, leading him to believe there was still room for growth.
Regarding ETH's poor performance in this cycle, he expressed understanding and shared a similar viewpoint with Lucien—Ethereum's challenge lies in limited innovation. Nowadays, Ethereum finds it difficult to implement large-scale reforms, and the pace of innovation has become cautious and fragmented.
Although the three newcomers have different perspectives, they all have a favorable view of Ethereum and recognize its value. In other words, Ethereum still enjoys a good reputation among newcomers, like a "friendly big brother" in the crypto world. However, ideals are often grand, and reality may not be as optimistic as they wish; the current state of Ethereum may not be as rosy as the newcomers perceive.
Ethereum in Reality: How Long Can Faith Last?
New Demand for ETH Gradually Weakens
Crypto KOL Murphy published an article revealing the current state of investors through ETH data: high-position investors are increasing their holdings, but new demand for ETH is weakening. After ETH fell below $2,000, there has been almost no new buying power.
The recent Cost Basis Distribution (CBD) data for ETH shows two main holding groups:
- High-position accumulation group ($3,200-$3,500): These investors did not sell during ETH's drop to $1,900 and continued to accumulate, showing strong faith and willingness to hold.
- Median reduction group ($2,600-$2,800): This group of holders gradually cut losses after ETH fell below $2,300, with only a portion of their holdings remaining.
CBD data for ETH over the past three months
The Controversy of ETH "Deflation Failure"
Peking University PhD Hu Yilin published an article stating that the so-called "deflation" of ETH is essentially a failed design. Under the PoS mechanism, even if the total amount of ETH is decreasing, it does not mean fair or healthy development.
He pointed out that Ethereum's economic model has structural inequalities—stakers are always the "inflated" side, while frequent traders bear the cost of "deflation." The rich, vested interests, and old money always sit comfortably in the profit zone; the more active the network trading, the more gas fees are burned, leading to more deflation of ETH, benefiting them. For newcomers, retail investors, and lower-tier traders, the more frequent the trading, the heavier the gas fee burden, which is further squeezed by the deflation mechanism.
Hu Yilin sharply summarized: under the ETH system, old money can not only outperform inflation with zero risk but also enjoy interest; even under the deflation mechanism, the "tap" above old money has not only not been turned off but has been turned on even more vigorously.
Whales Frequently Exiting
According to on-chain analyst Ali's shared data, in the past week, whale addresses sold nearly 130,000 ETH.
- On March 13, the whale ..eCa41 liquidated 6,401 ETH bought in December 2023, incurring a loss of $1.974 million.
- On March 14, an ETH whale, after holding for 25 years, deposited 16,467 ETH to HTX, potentially profiting $13.1 million.
- On March 17, a wallet dormant for 3 years sold all 67 ETH (worth $1.92 million), making only $126,000.
- ……
Don't Let Faith Turn into a Mass Exodus
In this world, everyone is here for profit.
The brand, technology, and ecosystem that Ethereum has accumulated over the years have shaped the trust newcomers have in it, making them willing to settle down, learn, try, and explore here.
But the market is ruthless…
Ethereum, don't let them learn only one thing in the end—"to run fast."
