The price of Ethereum has been lagging behind lately, and a hedge fund manager thinks he knows why. Zaheer Ebtikar, founder of Split Capital, believes that a combination of bad decisions by the Ethereum Foundation and shifts in how people invest in crypto are to blame.
The Shift in Crypto Investing
Ebtikar explains that crypto investing has changed a lot since 2021. Back then, venture funds and other private investors were pouring money into crypto, but that’s no longer the case.
Here’s what happened:
- Private investors are moving on: Venture funds are now more focused on “liquid plays” – investing in projects that are already established and have a lot of users. They’re also looking at projects beyond Ethereum, like Solana and Celestia.
- Institutional investors are stepping in: The launch of Bitcoin ETFs has brought a lot of institutional money into the crypto market. These ETFs are seen as a safe and easy way for big investors to get involved.
- Ethereum is caught in the middle: Ethereum is too big for private investors to support on their own, but it hasn’t captured the attention of institutional investors like Bitcoin has.
Ethereum’s Challenges
Ebtikar calls Ethereum’s situation “middle-child syndrome.” It’s not the hottest thing in the market, and it’s not getting the same love from investors as Bitcoin.
Here’s what Ethereum needs to do to get back on track:
- Attract institutional investors: Ethereum needs to convince big investors that it’s a good investment. This means showing them the value of the Ethereum network and its potential for growth.
- Get more attention from private investors: Ethereum needs to convince private investors that it’s still a good place to put their money. This means showing them that Ethereum is still innovative and has a bright future.
What’s Next for Ethereum?
Ebtikar thinks 2025 will be a crucial year for Ethereum. The damage from 2024 could be reversed, or it could get worse. He’s cautiously optimistic, but it’s clear that Ethereum has a lot of work to do if it wants to regain its position as a top crypto asset.
