Ethereum has seen an evolution in it is utility throughout the past several years.
In 2017, the cryptocurrency’s tremendous growth was driven by the ICO crazy, with token issuance on the blockchain igniting massive demand for ETH while also onboarding notable usership.
This trend persisted in 2018, only beginning to falter mid-way through the year as regulators began clamping down on Initial Coin Offerings.
The rise of Decentralized Finance (DeFi) in 2019 sparked another wave of Ethereum usage, with the total value of crypto locked within collateralized DeFi loans rapidly exceeding $1 billion.
So far this year, a mix of stablecoin issuance and DeFi growth has been driving ETH’s utility and network activity.
One prominent trader, however, does not believe that the current sources of utility for Ethereum will be enough to propel it to all-time highs, further adding that he anticipates ETH to severely underperform Bitcoin in the years ahead.
BlockTower trader: Ethereum unlikely to outperform Bitcoin during next parabolic cycle
There’s no question that the ICO craze seen in late-2017 and early-2018 is what drove Ethereum’s parabolic rise to highs of over $1,000.
Avi Felman – the head of trading at BlockTower – doesn’t believe that any other dynamic or use case will be enough to catalyze momentum of this magnitude, potentially leading Ethereum to see macro-underperformance of Bitcoin.
He spoke about this possibility in a recent tweet, saying:
“The ETH all time high price is likely a red herring, and was driven by a very specific dynamic (buy ETH to place in ICOs, no sell pressure because ICO treasuries didn’t think about that). BTC had no such dynamic. When BTC reaches its new ATH hard to see ETH anywhere near its ATH.”
This appears to be in refutation to recent comments from venture capitalist Chris Burniske, who said that he believes ETH will be trading at $7,500 if Bitcoin is able to surmount $1 trillion in network value.
This VC still believes DeFi will have bigger impact on ETH than ICOs
Despite Felman’s bearish sentiment regarding Ethereum’s macro outlook, Burniske doubled down on his bullishness towards Ethereum today.
He stated that while the ICO boom simply showcased one of the ETH network’s abilities, the DeFi boom has highlighted its capabilities on a much broader scale.
“If you think DeFi will have a smaller impact on ETH than ICOs, you aren’t paying attention. The ICO boom flexed Ethereum’s ability to perform 1 financial service: early-stage capital formation. DeFi will flex Ethereum’s ability to perform *all* financial services.”
Once the crypto market enters its next clearly defined bull cycle, it should quickly become clear as to just how impactful DeFi will be for Ethereum’s long-term growth.