VanEck Chief Defends Ethereum Against Recent Attacks, What’s In for ETH Price?
Amid strong criticism for the Ethereum blockchain and its underperformance this year, VanEck head of digital assets – Matthew Sigel – has come out defending the network while citing its strong economic model. The ETH price has also been subject to criticism failing to show enough traction even after the launch of the spot Ether ETFs in July 2024.
VanEck’s Matthew Sigel Addresses Ethereum Criticism
Expressing his frustration over the recent ETH bashing, VanEck Head of Digital Assets – Matthew Sigel – is “exhausting and intellectually dishonest”. While comparing with the price-to-earnings (PE) ratio in traditional finance, Sigel emphasized the importance of “moneyness” for Layer 1 blockchains like Ethereum and Solana.
He said that users should always judge a blockchain by its usage, utility, and trust within its ecosystem as a medium of exchange, store of value, and unit of account. Sigel added that Ethereum’s core utility stems from its role in supporting validators by paying transaction fees, thus driving broader use in DeFi and other services.
The VanEck chief also argued that a token’s value comes from the demand for goods and services traded for it, with Ethereum’s economic activity contributing to its long-term value. Besides, Sigel also acknowledged some of the challenges facing the blockchain.
He said that the surge in Layer-2 solutions for Ethereum is driving capturing transaction fees, potentially reducing the revenue that the blockchain collects. However, its focus on data availability could become more lucrative as the ETH ecosystem evolves. Besides, Ethereum co-founder Vitalik Buterin recently shared that he’s not fond of holding L2 tokens.
Sigel added that Solana’s low has attracted several Defi players to the platform. However, he added that Solana’s fee should increase over time in order to justify its valuation.
The constant trolling of #ETH feels exhausting and intellectually dishonest.
Every L1 needs moneyness to thrive, and moneyness is a multi-faceted concept. In traditional finance, a company’s stock is valued based on its price-to-earnings (PE) ratio, reflecting how much investors…
— matthew sigel, recovering CFA (@matthew_sigel) September 6, 2024
ETH Price Faces Bearish Sentiment
Poor demand and continued outflows from spot Ethereum ETF have led to a lack of catalyst to trigger the ETH price rally. On the other hand, other macro factors and hackers selling $42 million of ETH have contributed to the ETH price slump.
As of press time, the Ethereum price is trading 2.6% down at $2,284 with a market cap of $274 billion. This comes amid the broader crypto market crash following the Nvidia stock rout on Friday.
The spot Ethereum ETF market is also seeing waning demand with over $500 million in total outflows since launch. On Friday, VanEck even decided to shut down its Ethereum Futures ETF amid waning market demand.
Interestingly, analysts continue to remain bullish on ETH believing that it’s the final calm before the storm.
I don’t care if it consolidates for another month. I’m sure #Ethereum is getting ready for 5 figures pic.twitter.com/tQBpq9Kb4M
— Yoddha (@CryptoYoddha) September 4, 2024
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