Ethereum, the second-largest cryptocurrency, suffered its largest monthly drop in over two years during August, driven by weak ETF demand and growing technical concerns. Quinn Thompson, founder of crypto hedge fund Lekker Capital, noted that “the marginal new buyer doesn’t see value at current prices.”
The recently launched Ethereum ETFs have failed to meet expectations, experiencing $477 million in outflows in their first 29 days of trading, compared to the $5.1 billion inflow for Bitcoin ETFs in the same period. This lack of institutional interest, combined with declining network fees due to the rise of layer 2 blockchains, has contributed to a bearish sentiment around Ethereum. Brian Rudick, a researcher at crypto trading firm GSR, highlighted the pessimism, stating that the decline in network fees has led to Ether becoming inflationary again, a concern for crypto users who often criticize the traditional financial system’s money printing.
Ethereum’s Identity Crisis
Ethereum’s struggle to define its position in the crypto market has further exacerbated its challenges. While Bitcoin is increasingly seen as the go-to crypto for those betting on a Trump election win, Ethereum is “stuck in the middle between Bitcoin as the best store of value, and Solana as the best high-performance blockchain,” according to Rudick.
What to Expect in ETH Price in September as Ethereum Has Its Worst Two Months in Years
