The Ethereum (ETH) price has crossed the $3,000 threshold for the first time since April 2022 yesterday. However, amidst the celebratory fireworks in the crypto community, Fred Krueger, a renowned Bitcoin ETF expert, has voiced a starkly contrasting opinion. Krueger, a Wall Street veteran and prop trader, took to X (formerly Twitter) to express his skepticism about the current valuation of ETH, stating, “ETH is completely detached from reality.”
Why Ethereum Is “Completely Detached From Reality”
Krueger’s comments come at a time when the crypto market is witnessing a resurgence in investor interest, with Ethereum at the forefront due to its recent price rally. Despite this, Krueger points out a concerning trend in the usage of the Ethereum blockchain.
ETH is completely detached from reality. A deep dive.
———————————————————ETH is at $3,000. Surely this must mean that a ton of people are using ETH, and that this number is only going up, right?
Nope.
Eth, the chain has dropped from 120K… pic.twitter.com/141GwtB0yz
— Fred Krueger (@dotkrueger) February 21, 2024
“ETH is at $3,000. Surely this must mean that a ton of people are using ETH, right? Nope. Eth, the chain has dropped from 120K active daily users in 2021, to just 66K over the last year. The top app, Uniswap V3 is only getting 16K DAUs. I remember, back in 2020 this number was 60K or more,” he noted, emphasizing a decline in the platform’s direct utility and engagement.
The Bitcoin ETF expert further criticized the valuation of Ethereum, drawing parallels to meme coins like Shiba Inu due to its inflated market cap, which stands at $361 billion despite the fall in active users. “It really has become a type of meme coin, similar to Shiba Inu,” Krueger remarked, pointing to the stark contrast between Ethereum’s high market cap and its diminishing direct use.
Krueger argues that Ethereum is not only overvalued but also faces stiff competition from other blockchains that outperform it in terms of transaction costs and speed. “It’s not particularly cheap ($1.50 per transaction), or fast. If you are just interested in reward points for games, or casino-style DeFi apps — Solana, Avalanche, Near etc.. all crush it.”
Krueger also expressed skepticism about the future regulatory landscape for Ethereum, particularly concerning the potential for an ETH exchange-traded fund (ETF). “Finally, I don’t think…
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