Santiment Reveals 7 Reasons Why Ethereum's Price Did Not Meet Expectations

The blockchain analytics company Santiment has published an in-depth and sober assessment of Ethereum’s current position in the crypto market, highlighting this coin’s long-standing underperformance compared to Bitcoin, while also providing insightful perspectives on the path ahead. Ethereum (ETH) has witnessed an incredible price drop of 77% compared to Bitcoin (BTC) since December 2021, reflecting growing anxiety among long-term holders of the world’s second-largest cryptocurrency. Although the performance of ETH in US dollars is not too bad, investors who bought in November 2021, when ETH reached an all-time high of $4,760, have yet to see a profitable exit. Although it still holds the second position in terms of market capitalization, larger than Tether (USDT) by 28.2%, Santiment acknowledges that Ethereum is increasingly being regarded by critics as “ridiculous” compared to the largest market cap coins. Santiment has compiled a list of key stories and issues that may explain the relative decline of Ethereum: Layer 2 competition: While the development of Ethereum’s layer 2 scaling solutions has increased transaction speed, it has also diluted investment by diverting attention and capital away from ETH itself. Investor confusion: Ethereum’s complex string of upgrades, including Merge and other protocol changes, has left many investors feeling uncertain, especially when compared to the simple story of Bitcoin’s “digital gold.” Delays in improving the network and persistently high transaction fees have caused users to switch to faster and cheaper alternatives. Regulatory concerns: Ethereum’s unclear regulatory classification has made some investors hesitant, especially since Bitcoin has a relatively clearer legal status. attract users and developers away from Ethereum by offering lower fees and greater efficiency. A clear story is missing: When Bitcoin is considered a safe store of value and new altcoins are seen as high-risk, high-return projects, Ethereum’s position in between the two currencies becomes difficult to present to investors. Constant selling pressure: The emergence of ETH being bet after the upgrade has led to constant selling pressure, stifling price growth. Despite the pessimistic sentiment, Santiment has urged the community not to underestimate the achievements of Ethereum. The network remains a hub of innovation led by founder Vitalik Buterin and a group of dedicated developers. Ethereum still has one of the most vibrant ecosystems in crypto, with widespread adoption across DeFi, NFTs, and enterprise blockchain applications.