ETH/BTC Ratio Hits Five-Year Low: Ethereum Faces Technical Upgrades and Value Dilemma

Ethereum is at a crossroads, facing dual challenges of technological upgrades and value capture. This article will objectively analyze the investment value of ETH under the current circumstances, as well as the core arguments of both the bulls and bears.

Viewpoint of the Bullish Camp

1. The underlying infrastructure is solid: Ethereum still holds a dominant position in areas such as stablecoins, tokenization, and AI Agents.

2. Continuous technical upgrades: The upcoming Prague/Electra upgrade is expected to enhance performance and reduce Gas fees.

3. Structural adjustment of the ecosystem: Ethereum is shifting from a technology-oriented development path to one led by capital and the ecosystem.

4. Undervalued Value: Some analysts believe that ETH is currently severely undervalued by the market.

5. Macroeconomic liquidity potential: The overall market has not yet entered the "easing cycle," and ETH is expected to benefit.

6. Bull market rotation opportunities: With the overlay of interest rate cut expectations and ETF developments, Ether has the potential to return to the center.

7. The advantages of TVL are obvious: Ethereum accounts for more than half of the total locked value in DeFi.

8. Supply model advantages: The annual issuance rate of Ether is only 0.5%, lower than BTC's 0.83%.

9. Leading developer ecosystem scale: Ethereum has 65% of global on-chain developer innovation activities.

10. Foundation Reform: Restructuring the foundation is expected to improve the efficiency of technical decision-making and enhance transparency.

Bearish Camp's Viewpoint

1. Institutional price suppression and accumulation: Core institutions have not yet entered the market on a large scale, and ETH may not have dropped to the right level yet.

2. Weak ecological growth: Traditional sectors are stagnant, and new hotspots have a low correlation with Ether.

3. RWA Narrative Disillusionment: The credibility of Ethereum as the underlying RWA is weakening.

4. On-chain growth slows: New users are more inclined to choose L2 or other emerging public chains.

5. Supply Inflation: Due to the decline in transaction fees, the supply of Ether shows an upward trend.

6. The ETH/BTC ratio has dropped: reaching a five-year low, reflecting insufficient market confidence.

7. Increased competition: New public chains like Solana are emerging, attracting a large number of incremental users and developers.

8. Technical Route Doubts: Layer 2 scaling and PoS transformation may weaken the value of ETH tokens.

9. Core application outflow: Important applications consider independently launching chains, which may lead to a significant decrease in ETH transaction fee revenue.

10. Community Disagreement: There is controversy over the degree of dependence on the mainnet and L2, and the overall strategic direction is unclear.

Investment Strategy Recommendations

1. Long-term holders: If you believe in the foundational position of Ethereum, you may consider continuing to hold or gradually increasing your position.

2. Medium to short-term investors: You can moderately reduce your position, retain a flexible base position, and wait for clear signals.

3. Risk-averse individuals: They can gradually reduce their positions during a rebound while closely monitoring changes in key ecological indicators.

Regardless of the strategy chosen, it should be combined with personal risk preference and market judgment to make prudent decisions. The cryptocurrency market carries high risks, and investments should be made cautiously.