Ethereum, the brainchild of Vitalik Buterin, has revolutionized the world of cryptocurrencies since its inception. As the end of 2024 approaches, Ethereum continues to be a topic of intense debate and analysis in both the crypto and traditional financial worlds. Let's take a look at the current state of Ethereum, recent developments, and market performance.
Vitalik Buterin: Nobel Prize Candidate?
In an unexpected turn of events, Ethereum co-founder Vitalik Buterin has been named as a candidate for the 2024 Nobel Prize in Economics. This insight was discussed in a podcast by respected economists Tyler Cowen and Alex Tabarrok, authors of Marginal Revolution.
Cowen called Buterin an “unusual selection” but emphasized the importance of his contributions to financial economics. He said, “Vitalik built a platform, created a currency, refuted Mises' regression theorem in the process, and clearly followed in Satoshi's footsteps, but hey, what does it take to win a Nobel Prize?'' Do I have to?” he said. ”
Tabarrok agreed, highlighting Buterin’s continued contributions to Ethereum’s mechanism design, particularly the transition from proof-of-work to proof-of-stake. He compared this change to changing a car's tires while driving, emphasizing the technical complexity and innovation involved.
While the Nobel Prize selection remains uncertain, this recognition from a prominent economist signals the growing acceptance and appreciation of crypto innovation in mainstream economic discourse.
ETH/USD: Market performance and technical analysis
Despite the positive attention towards its founder, Ethereum's market performance has been mixed. As of October 2024, Ethereum's market power has declined to a range low of approximately 13.85%, a significant decline from its annual high of approximately 20%.
There are several factors contributing to this decline.
- Bitcoin’s dominance is on the rise: Bitcoin’s dominance is skyrocketing, due in part to high demand for Bitcoin spot ETFs. These ETFs currently hold $57 billion worth of BTC and have shown strong interest from institutional investors.
- Whale sales activity: Large Ethereum holders, including early ICO participants and the Ethereum Foundation, have been selling significant amounts of ETH. This selling pressure is contributing to Ethereum's declining performance.
- Weak Demand for ETH ETF: Unlike the Bitcoin ETF, the Ethereum ETF is suffering from outflows and lack of new inflows. Since its inception in July, the ETH ETF has recorded $849 million in outflows, according to the data.
- Increasing supply: Ethereum’s annual inflation rate recently reached 18%, its highest level since August. The lack of new demand to absorb this increase in supply is increasing pressure on sellers.
Technical analysis shows that Ethereum has underperformed against Bitcoin over the past year. Bitcoin is up more than 120% year over year, while Ethereum is up only about 50%.
