Crypto Expert Writes Bearish Scenario for Ethereum: “This Could Happen in the Future”

Formerly Arcane Research cryptocurrency Anders Helseth, vice president and director of research at analytics firm K33 Research, presented a bear scenario for Ethereum in his statement.

According to Helseth, Ethereum dominates the smart contract world due to its first mover advantage despite the current constraints in network technology, which brings with it higher liquidity.

Helseth Outlines Dangers for Ethereum in the Long Term

However, Helseth believes there are factors that could threaten Ethereum’s value in the long run.

In his statement, Helseth argued that one of the main factors contributing to Ethereum’s success was the “price will go up” logic among its users. This has led people to expect astronomical returns from their transactions and to get into Ethereum quickly rather than cheaply, leading to significant FOMO.

Helseth also identified bridging chains as another challenge facing Ethereum. While bridging is essential for interoperability between different blockchain platforms, it is costly, experimentally insecure and difficult for most users. As a result, liquidity remains on ETH due to risk and cost.

Helseth warned that the value of ETH could “collapse” if the world does not become more independent in the choice of Blockchain and ETH cannot solve its problems of scaling and high transaction fees. He argued that if Ethereum does not scale efficiently, it could lose users to other blockchain platforms that offer cheaper and faster transactions.

On the other hand, if the world becomes off-chain and bridging technology becomes so cheap, secure and easy that users can effortlessly move liquidity between different blockchain platforms, this could pose a challenge for ETH.

Helseth suggested that if users become more willing to research for the best blockchain platform for their needs, this could threaten Ethereum’s position in the market in the long run.

Further, Helseth suggested that scaling solutions could make blockspace nearly infinite and reduce its ability to meet payment demand for transactions. Therefore, even if everything scales in ETH, transaction fees will be so cheap that ETH will gain very little value.

Overall, Helseth’s bearish scenario for Ethereum highlights the potential long-term challenges the platform may face. While ETH has succeeded in dominating the smart contract world, it may need to address these challenges to maintain its position in the future.

*Not investment advice.