Fred Krueger, a renowned Bitcoin ETF expert, expressed via X his skepticism about the current valuation of ETH.
The price of Ethereum (ETH) yesterday surpassed the $3,000 threshold for the first time since April 2022. However, amid the celebratory fireworks in the crypto community, Fred Krueger, a well-known Bitcoin ETF expert, has expressed a sharply contrasting opinion.
Krueger, a Wall Street veteran and prop trader, took to X (formerly Twitter) to express his skepticism about ETH’s current valuation, stating: “ETH is completely detached from reality.”
Why Ethereum Is “Completely Detached from Reality”
Krueger’s comments come at a time when the cryptocurrency market is seeing a resurgence of investor interest, with Ethereum leading the way due to its recent price rally. Despite this, Krueger points out a worrying trend in the use of the Ethereum blockchain:
“ETH is at $3,000. Surely this must mean that a ton of people are using ETH, and that this number is only going up, right? Nope. Eth, the chain has dropped from 120K active daily users in 2021, to just 66K over the last year. The top app, Uniswap V3 is only getting 16K DAUs. I remember, back in 2020 this number was 60K or more,” he noted, emphasizing a decline in direct utility and platform engagement.
The Bitcoin ETF expert further criticized Ethereum’s valuation, drawing parallels with meme coins like Shiba Inu due to its inflated market capitalization, which stands at $361 billion despite falling active users. “It really has become a type of meme currency, similar to Shiba Inu,” Krueger commented, pointing out the stark contrast between Ethereum’s high market cap and its dwindling direct use.
Krueger argues that Ethereum is not only overvalued but also faces stiff competition from other blockchains that surpass it in terms of transaction costs and speed. “It’s not particularly cheap ($1.50 per transaction) or fast. If you are only interested in reward points for games or casino-style DeFi applications (Solana, Avalanche, Near, etc.), everything is ideal.”
The Crypto Community Reacts
In response to Krueger’s criticism, the X crypto community provided mixed reactions. One user questioned Krueger’s analysis by pointing out Ethereum’s rollup-focused roadmap and the misleading nature of using mainnet daily active users (DAU) as a metric for the platform’s health.
Krueger, however, is not convinced, stating that “Even L2s like Arbitrum have been in decline over the last 12 months. This is not the case that all is well in ETH-land.”
Another user attempted to highlight the cyclical nature of DeFi and the crypto market in general, suggesting that the current recession is a temporary phase of risk aversion.
However, Krueger dismissed these arguments, reiterating his lack of interest in speculative DeFi activities and emphasizing his belief in Bitcoin as the true revolutionary cryptocurrency. “I’m not interested in degen ape games. Have fun,” he said.
Krueger’s criticism extends beyond Ethereum to the broader cryptocurrency landscape, questioning the long-term viability and value proposition of altcoins, including Layer 1 solutions other than Bitcoin.
He argues that these platforms are unlikely to become major long-term value generators, comparing their control mechanisms to fiat currencies, but with central figures like Vitalik Buterin instead of traditional central bankers.
Krueger’s overall stance on Ethereum and the crypto market in general is clear. “My position on ETH. At the end of the day, Bitcoin is the revolution… Every other cryptocurrency is fighting for some other, much smaller use case,” he explained, underlining his belief in Bitcoin’s unique value proposition as a finite, decentralized monetary system.
By Audy Castaneda
