Crypto venture capitalist Andrew Kang made comparisons between Ethereum and tech stocks, noting similarities in price action between the current market and May 2021. Kang highlighted that both periods saw bullish momentum lasting around 9 to 10 months, but cautioned that extreme corrections could still occur over a several months’ time horizon.
Expressing skepticism about the ability of support levels to withstand potential market disruptions such as asset sales, Kang also pointed out concerns about Mount Gox real estate buyers and selling ETFs. He singled out Nvidia as potentially peaking and suggested that current buyers may only be leverage and short-term traders trying to capitalize on a downtrend.
Drawing parallels between Ethereum and well-known tech companies, Kang suggested that ETH’s valuation and growth prospects resemble past tech bubbles rather than sustained growth like companies such as NVIDIA and Amazon. He compared Ethereum’s trajectory to Intel, a company that faced slower innovation and increased competition resulting in lower growth rates and valuations.
Kang argued that Ethereum’s fundamentals do not support its high valuation and questioned how investors could justify a price of $420 billion with negative revenue growth and profitability. He acknowledged that while some crypto enthusiasts may accept this narrative, traditional finance investors might not be as convinced given the current fundamentals.
Ethereum is facing challenges such as declining interest in NFTs, the shift of on-chain commerce to other networks, and decreasing network fees. The future of Ethereum as an institutional asset class will be further explored at the upcoming Benzinga event on November 19.
Overall, Kang’s analysis raises concerns about Ethereum’s valuation and growth trajectory, comparing it to past tech bubbles and suggesting that the current fundamentals do not support its high valuation. He urges investors to consider these factors when evaluating Ethereum as an investment opportunity.
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https://www.benzinga.com/markets/cryptocurrency/24/06/39464170/ethereum-is-not-like-nvidia-amazon-but-more-like-intel-trader-says-negative-revenue-growth
