Ethereum's trump card: stablecoin dominance + interest-bearing assets

CN
16 hours ago

Recently, I saw a viewpoint on Twitter:

Currently, institutions led by SharpLink and BMNR are vigorously promoting Ethereum. Their goal is to drive up the price of Ethereum and then trick retail investors into buying in, so now they are starting to sell Ethereum. They believe that Ethereum will drop below $2000 again.

I rarely use terms like "conspiracy theory" or "playing a big game" to judge the actions of various institutions and market trends, nor do I guide my own behavior based on these institutions' actions and trends.

I only look at the fundamentals of the project and then combine my understanding of the project to decide my investment behavior.

I believe everyone is familiar with the recent actions of these two companies; I also often watch the interviews that the leaders of these two institutions have recently given.

I don't want to guess, nor do I have the ability to guess their true thoughts and plans; I only look at the viewpoints expressed by these two leaders.

There are some points I completely agree with:

  • Ethereum is an income-generating asset, and the interest it produces is the yield from staking. This is one of the basic reasons for SharpLink's leader's so-called "strategic" purchase of Ethereum.

  • The Ethereum mainnet and related layer two expansions currently hold an absolute monopoly in the stablecoin market and will also dominate the future RWA market, and its security is unmatched by other (smart contract) public chains. Stablecoins are Ethereum's ChatGPT moment, so banks and major institutions will inevitably participate in the maintenance of Ethereum's security, which naturally leads to buying Ethereum. This is one of the basic reasons for BMNR's frequent purchases of Ethereum.

I completely agree with at least 90% of these two viewpoints.

With this understanding, regardless of whether these institutions buy or sell, and regardless of how others in the market view it, I am optimistic about the future of Ethereum.

Moreover, I shared in an article a long time ago: I firmly believe that Ethereum's future will definitely reach $10,000. I originally hoped this could be achieved in this cycle, but now it seems unlikely. However, I believe we will see it within 10 years.

At the time of writing this article, the price of Ethereum was $3700.

Based on this understanding, what is the current operation regarding Ethereum?

If I were to give advice, I would suggest:

  • If you hold 0 Ethereum, at least buy one and then just leave it alone, treat it as if it doesn't exist, and check back in 10 years.

  • If you already have some, and this portion of money is not needed and will not affect your life in the coming years, like me, then I definitely would not sell at this price level.

The current price of Ethereum is very sensitive.

It could suddenly plummet, even dropping to below $2000 as mentioned in the previous viewpoint; however, it could also continue to rise, even reaching a level we may not see again in the future.

Both possibilities exist, so how should retail investors weigh their options?

This leads to a third viewpoint that I strongly agree with:

Bitcoin is the first crypto asset that retail investors cannot afford, and Ethereum is likely the second crypto asset that retail investors will soon be unable to afford.

Based on this viewpoint, as retail investors, if we currently hold Ethereum, would we prefer to sell now and wait for it to drop below $2000 to buy back, or simply endure the short-term market price fluctuations and not sell at least at this price level?

I would definitely choose the latter.

Because if I choose the former, and if I sell and it never drops below $2000 again, or doesn't drop to a price I can afford to buy back, then I become a retail investor who says goodbye to Ethereum forever. I do not want to take on that risk.

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