Ethereum price crashes as so-called killers continue to muster investor support
Ethereum's losses continue to mount, with the digital asset currently exhibiting 24-hour losses in excess of 6%
- While ETH's year-to-date (YTD) gains stand at a respectable 300+%, alternatives like Solana have been able to book YTD profits of 7,800+%.
- Ethereum's gas fee woes have continued to mount, with the price of minting a single NFT rising as high as 3 ETH on the network recently.
- The total value locked (TVL) across the Ethereum network recently exceeded $100 billion (AUD$138 billion approximately).
Following closely in the footsteps of Bitcoin, Ethereum, the world's second-largest cryptocurrency by total market capitalisation, has continued to face an increasing amount of bearish pressure, resulting in the altcoin dropping from AUD$4,900 to $4,400 within a matter of 90-odd minutes. At press time, ETH is trading for AUD$4,435.
While many had expected Ethereum to completely decouple from Bitcoin and forge its own path this year, it seems as though the market is still largely being driven by the flagship crypto. What's even more interesting to note is that the term "Ethereum killer" seems to have garnered a healthy amount of traction online, with a number of rival platforms posting impressive gains over the last 30-60 days.
In this regard, it should be highlighted that alternative projects such as Cardano, Solana, Binance Smart Chain, Polkadot and Terra – all of which feature full smart-contract functionality while offering minimal gas fees – have been on an absolute tear over 2021.
For example, the value of SOL, Solana's native crypto token, has risen by a whopping 300% over the last 3 months, while posting year-to-date (YTD) profits of more than 7,800% gains. In comparison, ETH's 90-day and YTD gains stand at just 63.77% and 385.36% respectively. Also, while it took Ethereum more than half a decade to garner a market capitalisation of around US$400 billion, Solana's total cap has already scaled up to US$47 billion.
Ethereum's operational woes still persist
Despite Ethereum's much-hyped transition to ETH2.0 all set to occur sometime next year, the network can currently process only 15-25 transactions per second, all while featuring an extremely poor data throughput ratio. And with the digital asset landscape evolving at an extremely rapid pace, a number of ETH alternatives have continued to emerge, allowing for mass volumes of information to be processed near instantly.
In addition, bloated transaction fees have continued to haunt the Ethereum ecosystem despite the successful deployment of the recently concluded London hard fork, which sought to regulate the currency's gas fee levels. To put things into numbers, during peak traffic levels, the cost of mining an NFT on the platform rose as high as 3 ETH recently, a figure that is actually higher than what many NFTs cost.
Demand continues to rise anyway
As per data made available by analytics provider DappRadar, the total volume locked (TVL) across all ETH-based DeFi protocols recently scaled past the all-important US$100 billion threshold. In comparison, the Binance Smart Chain (BSC) currently has a total of US$18 billion locked across its ecosystem, a figure that is less than 20% of Ethereum's current TVL.
Disclosure: The author owns a range of cryptocurrencies at the time of writing