Ethereum’s True Value? Lower Than You Think

Reasons to Trust

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Why Ethereum is Overvalued

Ethereum’s price has not kept pace with its fundamentals, with a significant disparity in performance compared to Bitcoin over the past three years. Despite Bitcoin’s price quadrupling from $21,500 to $82,302, Ethereum’s price has remained stagnant at around $1,558, essentially the same as its August 2022 price of $1,600.

Supply Variations

A key factor contributing to Ethereum’s overvaluation is its supply. With 122 million circulating tokens, Ethereum has a significantly larger supply than Bitcoin’s 21 million coins. This has led to a situation where some investors are paying $9,300 for an asset that is 60% premined, or created, before the start of public mining.

Impact of Macroeconomic Forces

Ethereum’s price has been sensitive to macroeconomic forces, falling to a multi-year low of $1,380 on the back of global tariff trade war tensions. The cryptocurrency bounced back immediately to $1,680 on April 9 after US President Donald Trump declared a three-month tariff tariff hike pause on various countries, with China being the exception.

A Long-Standing Campaign Against Ethereum

This is not the first time Samson Mow, a prominent Bitcoin maximalist, has criticized Ethereum. In November 2024, he cautioned investors that the fate of Ethereum could be the same as their favorite tokens. Mow has been vocal against ETH for years, warning investors to sell everything, including Ethereum, and invest in Bitcoin instead.

Conclusion

The debate surrounding Ethereum’s value highlights deep-seated differences in cryptocurrency investment philosophies. While Bitcoin maximalists like Mow focus on scarcity and Bitcoin’s "digital gold" status, Ethereum supporters highlight the platform’s smart contract abilities and wider applications ecosystem. As the price differential between the two leading cryptocurrencies continues to expand, these debates regarding relative value and suitable pricing models draw greater interest from investors and market analysts.

FAQs

Q: What is the main reason for Ethereum’s overvaluation?
A: The main reason for Ethereum’s overvaluation is its supply, with 122 million circulating tokens compared to Bitcoin’s 21 million coins.

Q: What is the significance of the premined tokens?
A: The premined tokens, or 60% of the supply, were created before the start of public mining, which has led to a situation where investors are paying too much for an asset with an exaggerated supply.

Q: How has Ethereum’s price been affected by macroeconomic forces?
A: Ethereum’s price has been sensitive to macroeconomic forces, falling to a multi-year low of $1,380 on the back of global tariff trade war tensions and bouncing back immediately to $1,680 after a tariff tariff hike pause was announced.

Q: What is Samson Mow’s stance on Ethereum?
A: Samson Mow, a prominent Bitcoin maximalist, has been vocal against Ethereum, cautioning investors to sell everything, including Ethereum, and invest in Bitcoin instead.

Q: What is the significance of the price differential between Bitcoin and Ethereum?
A: The price differential between the two leading cryptocurrencies continues to expand, drawing greater interest from investors and market analysts in common.