Just 24 hours ago many in the Ethereum community we’re in the pits of despair as over the last few days they had watched BTC skyrocket in price while ETH stayed relatively flat and the ETH/BTC ratio collapsed down to around ~0.023 (a level not seen since May of 2020).
But then the pendulum swung back and ETH shot through $700 – a price not seen since May of 2018!
1/ Okay enough shitposting from me for today so here’s some friendly advice for my Etherean friends. What you are feeling right now watching the ETH/BTC ratio fall is exactly what many Bitcoiners felt during DeFi summer. I know that it sucks but this is what markets do.
December 27th 2020
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I put the above thread out just a few hours before the ETH price reversal (yes, I’m taking credit).
I’ve written about what I call the ‘sentiment pendulum’ before and I believe that everything I wrote in that piece is as relevant today as it was back then. The exact same pattern was playing out as one community, the Bitcoiners, were dunking on another community, the Ethereans, for the weak price action of ETH against BTC. This is exactly the same as what happened during DeFi summer when Ethereans were dunking on Bitcoiners and I was literally laughing to myself as I watched the sentiment totally flip over the last 24 hours.
I’m someone who doesn’t believe in efficient markets and I think that pretty much nothing is ever “priced in” because if it were, there wouldn’t be any alpha for people to take advantage of. For example, investing in ETH today is investing in its future – you are making a bet that Ethereum will end up as a widely used global network, that the eth2 network rollout will be completed, that core economic primitives for ETH such as EIP-1559 are implemented and ultimately that ETH will capture all of this value. Now, there are many people out there who either don’t think this is going to happen or are simply not aware of any of it – that is the advantage you have as a more savvy market participant. Buying ETH today doesn’t come without risk though – none of what I’ve outlined is guaranteed – but that risk is the difference between something being “priced in” and something still having some alpha left to generate.
Outside of the price action, Ethereum has had an absolutely amazing year as measured by level of innovation, product shipments from various projects, number of projects on Ethereum in general, growth in DeFi across all metrics, the strong launch of the eth2 Beacon Chain and so much more. It’s extremely hard to find any reason to be bearish on Ethereum or ETH for the foreseeable future and if you want the ultimate bull case, feel free to watch this video! I’ll also be recapping Ethereum’s entire 2020 on The Daily Gwei YouTube channel soon – be sure to subscribe so that you don’t miss it!
Have a great day everyone,
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All information presented above is for educational purposes only and should not be taken as investment advice.