Andre Cronje, Founding Partner of Sonic Labs, Ethereum $2,137.64The price decrease in the last months has attributed the internal problems of the network to the increasing competition. Layer 2 projects disintegrate the liquidity and weaken the user experience of central rankings negatively affect ETH’s performance. On the other hand, the speed and user -friendly infrastructure of alternative networks such as Solana, Tron and XRP harden the competition against Ethereum. Analysts warn ETH that it can go below $ 2,000, while investors should review their strategies.
Layer 2 and internal problems of Ethereum
Andre Cronje said that one of the main reasons for Ethereum’s price performance is Layer 2 solutions. Although these projects are designed to alleviate the process load on the network, the liquidity leads to the distribution of different layers. The fact that users have to keep their money in multiple layers increases transaction costs and complexity. In addition, the use of central rankings damages the network of decentralization.
Another factor in ETH’s recent decline is that beings are under short -term pressure. Especially the sale of ETHs used as collateral during the liquidity congestion periods creates additional pressure on the price. Cronje states that this has become more pronounced especially in volatil market conditions.
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Alternative Networks and Increase Competition
Ethereum’s technical deficiencies and uncertain road map direct developers to alternative block chains. Cronje emphasized that Solana’s high trading speed, low costs of TRON, and XRP’s corporate -oriented infrastructure has become attractive for investors. The improvements of these networks in user experience have the potential to adopt faster than Ethereum.
The increase in competition requires Ethereum to produce innovative solutions to protect the market share. However, the slow progress of the network on scalability and user -friendly tools is the focus of criticism. Analysts, especially new generation projects prefer to prefer other networks instead of Ethereum, ETH’s long -term value is in risk.
Responsibility Rejection: The information contained in this article does not contain investment advice. Investors should be aware that crypto currencies carry high volatility and thus risk and carry out their operations in line with their own research.
