Alas, Ethereum (CRYPTO: ETH) is, on average, an infuriating coin to hold. If you’d invested a meaty sum of $4,000 into it 12 months ago, today you’d have a grand total of $1,859 and probably some sour questions about your life’s decisions. If you bought it as far as 36 months back, you’d still have just $2,959 or so — and you’d doubtlessly be even more impatient to get a return from it after having seen its price crater in recent weeks.
But what about the most likely performance coming in the next year or so? Unfortunately, you might see your money cut in half again. Here’s why.
The problem of the moment for Ethereum is that sentiment can’t seem to stop going from bad to worse thanks to the downwardly mobile price action that’s been going on for many months now. But that shouldn’t concern investors too much, as sentiment is inherently fickle. The deeper issue is that the bad sentiment surrounding this coin has its origins in the chain’s real stumbling blocks.
For a coin to grow, there needs to be demand from investors and blockchain developers. Investors buy the coin because they think it’ll go up as a result of the quality of the underlying technology, the presence of value-generating drivers of demand, and because they expect that the developers will continue to innovate and produce projects that will attract people to use the chain. Developers, on the other hand, choose to build their cryptocurrency projects on chains where they’re familiar with the programming languages required, where they can expect investors to provide their projects with capital, and where it’s convenient to make, test, and launch applications.
Ethereum is currently struggling across all of those fronts with both of those key groups. In terms of its technology, it’s true that it’s the chain with the most extensive smart contract functionality. That means it could, in theory, be a leader in decentralized finance (DeFi), artificial intelligence (AI) agents on the blockchain, and many other important, emerging segments of the cryptocurrency market.
The problem is that neither developers nor investors have a friction-free experience when they interact with the chain. In fact, it’s usually the opposite.
The chain’s gas fees remain very high in comparison to competitors like Solana, which also has essentially the same set of features. Furthermore, transaction times remain far slower than Solana, and the ecosystem of tools for developers and investors alike is of similar quality across the two chains. As of March 14, swapping tokens on Ethereum costs $0.44 on average and roughly a penny on Solana.