Ethereum, the second biggest crypto asset by Market capitalization is currently down 50% from the All time-high price level it reached in 2021.
Analysts believe Ethereum’s poor interoperability is a leading cause of the slump and the inability of the crypto asset to hit the price level it hit in 2021.
In addition to that, Ethereum’s Whales recently stopped acquiring the asset as pointed out by the analyst casting a shadow on the long-term potential of the asset.
Crypto whales dumping Ethereum
Ethereum has come short on the weekly and monthly charts for a sustained period. The crypto asset hit $4,800 in 2021 but has not come anywhere close to that since 2021.
On-chain analyst Ali Martinez pointed out that Ethereum Whales stopped acquiring the asset in July and are currently selling and redistributing their existing Ethereum assets.
#Ethereum whales stopped accumulating $ETH in early July. Since then, they’ve been selling or redistributing their #ETH holdings. Martinez tweeted
This activity by Ethereum whales could lead to a potential price drop according to the analyst.
Multi-coin Partner and analyst, Kyle Samani added his perspective to the conversion on Ethereum and its prolonged poor performance. Samani highlighted that Ethereum’s interoperability issue and is poor financial gravity are the two key issues with the project.
He discussed this in a podcast with Bankless while highlighting that Ethereum’s price performance has been poor compared to its competitors Bitcoin and Solana.
Ethereum’s Interoperability Issue
Samani brought to light the interoperability challenges facing the Ethereum project while also touching on some user experience hitches as well.
“A lot of people use Ethereum, obviously, and they hate bridging, and they hate paying the fees, and they hate waiting, and they’re waiting for the thing to confirm,” Samani said
Ethereum’s poor interoperability means that its users find it difficult to move Ethereum assets between two platforms like Binance and Coinbase or between two networks like Tron and Arbitrum.
Samani blamed this challenge on the lack of a universally agreed standard in the crypto industry. He believes that a $300 billion asset like Ethereum should not be having the issues it does with interoperability and user experience.
What to Know
- In cryptocurrency, interoperability is the ability of different blockchain networks to communicate, exchange data, and interact with each other. It’s important for the development of blockchain technology because it can help overcome limitations and unlock the potential of decentralized networks.
- Ethereum’s current price is $2,310 and is 52% down from its all-time high.
