Ari Paul, CIO and Managing Partner of BlockTower Capital, says the current market dynamics that make it difficult for large-cap cryptocurrencies to experience significant price upside
Despite Ethereum’s strong fundamentals, the flagship altcoin was underperforming in the market, according to Hal Press, founder of North Rock LP.
The press has tweeted that Ethereum’s ecosystem remains vibrant and developers are performing at an extremely high level, but it’s one of the worst performers due to the “overhang” of Shanghai, which it says is not sustainable.
However, Ari Paul, CIO and Managing Partner of BlockTower Capital, takes a different view on this. He believes Ethereum’s underperformance is due to its strong fundamentals over the past year, as the asset has never “capitulated”. This has led to Ethereum not being able to keep pace with other cryptocurrencies that have rebounded from lows.
Besides, Paul points out that current market dynamics make it difficult for large-cap cryptocurrencies like Ethereum to experience a meaningful rally.
With little new money entering the crypto space, minor spin flows within crypto can double the value of coins with a market capitalization of up to $5 billion. However, these parts can also sink up to 80% just as easily.
Shanghai’s Ethereum upgrade is expected to mark the blockchain’s full transition to a proof-of-stake network, allowing validators to withdraw rewards earned by adding or approving blocks to the blockchain. While this should be a positive development for the Ethereum network, it remains to be seen if it will have a significant impact on the performance of the cryptocurrency market.
As the crypto market remains unpredictable, investors and traders will need to closely monitor Ethereum’s market performance and conditions.