A recent analysis from Messari has ignited a lively discussion in the cryptocurrency community, following claims that Ethereum is “dying” due to a significant drop in network revenue for August. AJC, a research manager at Messari, took to X on Saturday to assert that “Ethereum’s fundamentals are collapsing,” citing that Ethereum’s revenue from transaction fees fell to $39.2 million in August, marking a decline of over 40% year-on-year and about 20% month-on-month.
Despite the concerning figures, many in the crypto sphere disagreed with AJC’s bleak outlook. Critics highlighted Ethereum’s positive trends in other areas, including increasing metrics, strong app revenue, an uptick in stablecoin supply, and ongoing advancements in layer-2 (L2) scaling. They also emphasized that Ethereum should be viewed as a commodity rather than a tech stock, suggesting that its value should not be solely dependent on revenue figures.
Speaking to Cointelegraph, Henrik Andersson, chief investment officer at Apollo Crypto, downplayed AJC’s concerns, arguing that data from various analytics tools indicate that Ethereum remains a dynamic ecosystem. He pointed out that both stablecoin supply and transaction throughput are near all-time highs. Moreover, as of August 30, Ethereum boasted over 552,000 daily active addresses—a 21% increase since the same time last year. “We believe both Ethereum and Bitcoin have a place in a crypto portfolio. Ethereum is becoming the neutral decentralized base layer for finance,” Andersson stated. He underscored that while Bitcoin serves as a store of value, Ethereum’s worth cannot exclusively be hinged on its revenue.
In defense of his position, AJC explained that the revenue collected in Ether (ETH) signifies a decline in one of the major historical demand drivers, with demands currently “trending toward zero.” He further contended that metrics like active addresses and transaction counts are “meaningless statistics as it pertains to demand.”
Interestingly, the notion of Ethereum’s demise is not new. Various sources have declared Ethereum “dead” over 150 times since 2014, with approximately 40 of those declarations occurring this year alone, according to the Ethereum Obituaries platform. Ryan McMillin, chief investment officer at Merkle Tree Capital, commented that Ethereum often faces speculation about its viability during unfavorable market conditions, such as falling fees or increased competition.
He acknowledged that while smart contracts represent a competitive sector and there is potential for developers to shift to other platforms, Ethereum’s robust developer community, established DeFi protocols, and growing regulatory acceptance offer it significant resilience. “The bigger story is that crypto is maturing into an ecosystem of differentiated assets,” McMillin noted, asserting that Ethereum will continue to play a central role.
Furthermore, he remarked that Ethereum has been caught in a challenging situation for nearly two years, straddling the narratives surrounding Bitcoin’s status as digital gold and Solana’s reputation for faster, cheaper transactions. According to McMillin, while Ethereum’s appeal as “ultrasound money” may not stack up against Bitcoin, it benefits from recent developments such as spot exchange-traded funds, which have begun to facilitate traditional finance flows towards Ether.
However, he warned that this advantage might be short-lived, with anticipations of spot Solana ETFs potentially leveling the playing field for institutional investment. As the cryptocurrency landscape evolves, the ongoing dialogues around Ethereum will likely shape its trajectory and influence its position among its peers in the coming months.
