Krueger’s comments, shared in a post on X, highlighted notable statistics about network activity and Ethereum’s transactional utility.
Bitcoin supporter Fred Krueger has recently expressed concerns about Ethereum (ETH) fundamental trends and potential regulatory hurdles.
Krueger’s critique highlighted Ethereum’s skyrocketing price, especially its two-year peak recently reached and juxtaposed with declining network usage.
Ethereum Utility Decrease Raises Alarms
Even though ETH hit $3,000, Krueger noted a significant drop in daily active users (DAU) from 120,000 in 2021 to just 66,000 in 2023. Bitcoin Maxi also highlighted the decline in user activity on the Blockchain’s “main application,” Uniswap V3, Ethereum’s main decentralized exchange protocol, and highlighted it as a remarkable concern.
Krueger said that “The main app, Uniswap v3, only gets 16k DAU. I remember in 2020 this number was 60,000 or more. It is definitely the case that ETH as a chain is no longer used directly.”
Krueger also clearly compared the current state of Ethereum and a “meme coin,” citing similarities to assets like Shiba Inu (SHIB).
Despite Ethereum’s price performance, Krueger highlighted a perceived erosion in its usefulness, especially when compared to alternative blockchain networks such as Solana, Avalanche and Near. The Bitcoin Maxi continued, noting the following:
“Of course, that doesn’t stop investors from offering up to a market capitalization of $361 billion. It has really become a type of meme currency, similar to Shiba Inu. It is not particularly cheap ($1.50 per transaction) or fast. If you are only interested in reward points for casino style DeFi games or apps (Solana, Avalanche, etc.), everything is great.”
Regulatory Uncertainty and Community Reaction
Krueger’s criticism extended beyond Ethereum’s utility to its regulatory perspective. He expressed doubts about the possibility of a spot approval of an Ethereum Exchange Traded Fund (ETF), citing concerns about regulatory scrutiny in the following terms:
“Finally, I do not think Gensler is going to allow an Eth EFT. If you believe in fairy tales, have fun. I just don’t think Gary wants to make his second ETF a massive pre-mine. It set a very bad precedent.” The Bitcoin Maxi concluded: “Avoid ETH at all costs.”
Despite Krueger’s assessment, the ETH community’s belief in ETH remains unwavering. Under Krueger’s post, many were found to contradict Krueger’s comment. They argue that considering only daily active users (DAUs) on the mainnet is misleading, similar to assessing Bitcoin’s value based solely on its mainnet usage:
“Are you aware that Ethereum has a modular i.e. rollup centric roadmap? Using DAU on mainnet only is extremely disingenuous, as it would be with BTC mainnet.
I agree with your take that it was / is clownish to try and portray ETH as sound money, but you discredit yourself here.”
Another user, “John Doe,” maintains that there has been a significant decrease in total value locked (TVL) across the DeFi space, indicating a trend of decentralized finance (DeFi) users reducing their risk exposure sooner. to potentially reinvest in the future:
“Sir, as much as you are well respected in the ETF space, you’re not well aware of how DeFi Cycles work, just check out Defillama and see the TVL charts from the last bull run v/s today. There’s been sharp decline across the space. This is degenerates de-risking, before we Ape in again.”
By Leonardo Perez
