Author: Fairy, ChainCatcher

Every round of bull and bear markets always welcomes a batch of curious new faces. In their eyes, Ethereum is often seen as an important threshold to enter the crypto world—technologically advanced, ecologically mature, and with a solid industry position.

But is reality really that beautiful?

On one side is the trust that newcomers have in Ethereum, and on the other is the market's cold indifference. After communicating with several university students majoring in blockchain, we found that there may be a certain disconnect between their expectations and the current state of ETH.

Are these hopeful newcomers the builders of the future, or will they ultimately be mercilessly eliminated by the market?

Ethereum from the Perspective of Newcomers: Trust, Technology, and Understanding

Tusi

A freshman student majoring in blockchain, completely inexperienced, has not yet engaged in cryptocurrency or contract trading.

Tusi has not entered the market yet, as he believes his knowledge is insufficient and is hesitant to invest recklessly. However, when discussing Ethereum, he expressed a natural sense of trust, considering it a leading project and relatively authoritative.

When asked if he would consider buying ETH in the future, he said he would think about it, as he believes the risk of ETH appears smaller compared to other cryptocurrencies.

Lucien

A senior student majoring in blockchain engineering, primarily focused on smart contract development and technical aspects, with limited market knowledge. ETH accounts for 20% of his cryptocurrency spot investments. Overall, he is optimistic about Ethereum.

Lucien stated that from his understanding, Ethereum's technology is developing, and its growth is driving the industry's development. For example, the recent upgrade of Ethereum significantly reduced gas fees on the chain, lowering user interaction costs. Additionally, the improvements from the Cancun upgrade are more developer-friendly, such as the new opcode in EIP1153 becoming an important component of Uniswap V4.

However, he also pointed out that Ethereum's framework is relatively mature, and current improvements are mainly optimizations, so the growth rate is relatively limited.

Vernon

A blockchain engineering graduate for nearly a year, focusing on meme coins and contract trading, with a preference for short-term operations.

Among all crypto assets, ETH is the only large-cap coin that Vernon has invested in, mainly for wealth management and risk diversification. When discussing his reasons for choosing ETH, he mentioned that he bought it when the price had dropped significantly, and this cycle had not yet broken through historical highs, leading him to believe there was still room for growth.

Regarding ETH's sluggish performance in this cycle, he expressed understanding and shared a similar viewpoint with Lucien—that Ethereum's challenge lies in limited innovation. Nowadays, Ethereum finds it difficult to implement large-scale reforms, and the pace of innovation has become cautious and fragmented.

Although the three newcomers have different perspectives, they all hold a favorable view of Ethereum and recognize its value. In other words, Ethereum's "popularity" among newcomers remains strong, resembling a "friendly big brother" in the crypto world. However, ideals may be abundant, but reality may not be as optimistic as they wish; the current state of Ethereum may not be as bright as the newcomers perceive.

The Reality of Ethereum: How Long Can Faith Last?

New Demand for ETH Gradually Weakens

Crypto KOL Murphy published an article revealing the current state of investors through ETH data: high-position investors are increasing their holdings, but new demand for ETH is weakening. After ETH fell below $2,000, there has been almost no new buying power.

The recent Cost Basis Distribution (CBD) data for ETH shows two main holding groups:

1. High-position accumulation group ($3,200-$3,500): These investors did not sell during ETH's drop to $1,900 and continued to accumulate, showing strong faith and willingness to hold.
2. Median reduction group ($2,600-$2,800): This group of holders gradually cut losses after ETH fell below $2,300, with only a portion of their holdings remaining.

CBD data for ETH over the past 3 months

Controversy Over ETH's "Failed Deflation"

Peking University PhD Hu Yilin published an article stating that the so-called "deflation" of ETH is essentially a failed design. Under the PoS mechanism, even if the total amount of ETH is decreasing, it does not mean fair or healthy development.

He pointed out that Ethereum's economic model has structural inequalities—stakers are always the "inflated" side, while frequent traders bear the cost of "deflation." The rich, vested interests, and old money always sit comfortably in the profit zone; the more active the network trading, the more gas fees are burned, leading to more deflation of ETH, benefiting them. For newcomers, retail investors, and lower-tier traders, the more frequently they trade, the heavier the gas fee burden, which is further squeezed by the deflation mechanism.

Hu Yilin sharply summarized: under the ETH system, old money can not only outperform inflation with zero risk but also enjoy interest; even under the deflation mechanism, the "faucet" for old money has not only not been turned off but has been turned on even more vigorously.

Whales Frequently Exiting

According to on-chain analyst Ali, data shows that in the past week, whale addresses sold nearly 130,000 ETH.

• On March 13, a whale..eCa41 liquidated 6,401 ETH bought in December 2023, incurring a loss of $1.974 million.
• On March 14, an ETH whale, after holding for 25 years, deposited 16,467 ETH to HTX, potentially profiting $13.1 million.
• On March 17, a wallet dormant for 3 years sold all 67 ETH (worth $1.92 million), making only $126,000.
• ……

Don't Let Faith Turn into a Mass Exodus

In this world, everyone is here for profit.

The brand, technology, and ecosystem that Ethereum has accumulated over the years have shaped the trust newcomers have in it, making them willing to take root, learn, try, and explore here.

But the market is ruthless…

Ethereum, don't let them ultimately learn just one thing—"to run fast."

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