Analysts from Standard Chartered have characterized Ethereum as experiencing a “midlife crisis,” with ETH struggling to maintain its position around the $2,000 mark.
Ethereum (ETH) seems to be trapped in a state of limbo, as it’s losing value to layer-2 networks while failing to engage investors. The second-largest cryptocurrency by market capitalization has plummeted 40% over the last three months, prompting analysts to suggest that the network is indeed facing a “midlife crisis.”
In a conversation with a financial news outlet, the head of digital assets research at Standard Chartered, Geoff Kendrick, remarked that the network has “given away value for free” and has essentially “commoditized itself” through layer-2 solutions.
Currently, Ethereum is grappling with preventing its price from declining further. At the time of writing, ETH is trading at approximately $2,054, having previously dropped to $1,813 earlier in March. Research analyst Adam McCarthy from Kaiko suggests this downturn may stem from the perception that Ethereum “is just not interesting to most people.”
“It’s challenging to generate enthusiasm for remarkable engineering achievements when there are so many other distractions competing for attention.”
Adam McCarthy
In addition, Ethereum’s developers are facing internal conflicts, and user activity on the platform has not increased. Carol Alexander, a finance professor at the University of Sussex, noted that the vision for decentralized finance seems “much more distant now than it did a year ago” and that the decision-making process within the Ethereum community has become “rather chaotic.”
Recently, Ethereum’s direction has come under criticism, even from former Ethereum Foundation engineer Harikrishnan Mulackal, who highlighted the network’s governance issues, claiming it suffers from a “lack of a clear and cohesive vision.”
Mulackal warned that without stronger leadership, Ethereum could stagnate, advocating for more rapid updates and the implementation of “one hard fork each quarter.” He cautioned that otherwise, Ethereum risks repeating the same outcomes it has faced over the past five years.