By
Godfrey Benjamin
April 29th, 2024
Veteran market trader Peter Brandt is bearish on Ethereum as he slammed the coin’s high gas fee and complicated L2 terrain.
Ethereum (ETH), the second largest cryptocurrency by market capitalization has come under fire as renowned crypto trader Peter Brandt dubbed it a ‘junk coin’. Taking to the X platform, Brandt stated, “I get tired of saying it, but ETH is a junk coin.”
Peter Brandt’s Argument against Ethereum
Ethereum commonly referred to as the “king of smart contracts” has been a notable contender in the crypto market since its inception in 2015. Acting as a leading platform for hosting Decentralized Applications (dApps) and smart contracts, Ethereum continues to serve as the bedrock for many innovative projects and protocols.
Despite the cryptocurrency’s influence, Brandt argued that Ethereum as a store of value is a ‘junk coin’. Brandt claims that ETH as a store of value is best described as a Bitcoin pretender. Simply explained, for a cryptocurrency to possess a store of value property, it means that its value holds over a long period. Essentially, a good store of value should be scarce and verifiable.
Notably, Brandt’s argument is supported by recent comments from Ark Invest CEO, Cathie Wood, in which she stated that Bitcoin is fast replacing gold as a store of value. This would imply, she believes, that people are increasingly turning to Bitcoin (not Ethereum) for long-term investments.
Another flaw raised by Brandt to back up his belief of ETH being a ‘junk coin’ pertains to the cryptocurrency’s functionality. The legendary trader highlighted that ETH has a perceived difficulty when integrating with Layer-2 solutions because of associated outrageous gas fees. Despite his pessimistic comments, Brandt noted that ETH will always attract investors.
I get tired of saying it, but $ETH is a junk coin despite mindless devotion of Etheridiots.
As a store of value it is junk – a $BTC pretender
Its functionality is also junk – difficult to deal with L2s and outrageous gas fees
Of course it will always attract "investors" pic.twitter.com/7KAYMiwsnf— Peter Brandt (@PeterLBrandt) April 4, 2024
While Brandt’s comments have been supported by many in the online community, it remains to be clarified whether he has recently transacted on the L2 protocols. This is because several reports have shared accounts of how the recently launched Ethereum Dencun Upgrade has helped reduce rates for L2 protocols.
Meanwhile, this is not the first instance where Brandt has raised a bearish outlook for Ethereum. In December, the renowned trader predicted that the price of ETH could dwindle to $650.
Ethereum’s Price Movement and Future Prospects
Current data from CoinMarketCap shows that ETH is trading at $3,265, down by 2% in the past 24 hours. In a similar move, the market capitalization is down by 2% to $391 billion. Amidst these declines, trading volume has increased by a huge 10.4% to $15.5 billion. This increase indicates that despite prevailing volatility in the market, investors are still interested in scooping the coin.
One key factor that could drive the price of ETH further is the introduction of a spot Exchange-Traded Fund (ETF) in the US. While it is still uncertain if the launch will occur in May due to regulatory challenges, the adoption of ETH by institutional players could drive the price to an all-time high.