Bitwise: Hating Ethereum may seem trendy now, but you will regret it in the end.

Bitwise Chief Investment Officer Matt Hougan wrote an article "A Contrarian Bet on Ethereum", stating that Ethereum is currently being heavily criticized, and it seems trendy to hate on Ethereum right now, but in a while, everyone will feel foolish.

Ethereum developers talk about development difficulties, revealing that Ethereum has deviated from the right track

ETH/BTC Exchange Rate Returns to 2021 Low

The ETH/BTC exchange rate recently hit a three-year low, returning to the level of April 2021. The year-to-date increase also significantly lags behind its main competitor Solana:

• BTC: 38%

• SOL: 31%

• ETH: 3.23%

Matt Hougan pointed out that the Ethereum community sentiment is also quite low.

No One Likes Ethereum Now

Matt Hougan listed several reasons for Ethereum's decline:

Election Risk

Ethereum faces substantial risks in the U.S. presidential election.

While Bitcoin is largely considered safe from regulation, with SEC Chairman Gary Gensler even acknowledging it is not a security, Ethereum is not. The SEC seems to view staked ETH as a security and has serious concerns about the DeFi ecosystem driven by Ethereum.

If Janet Yellen wins the election and continues Biden's hostility towards cryptocurrencies, Ethereum may face challenges.

Competition from Public Chains like Solana

Ethereum faces fierce competition from emerging public chains with high throughput and low costs, with Solana being the main challenger, and other existing and upcoming public chains starting to exert pressure.

In the crypto field where new projects often outshine older ones, due to Ethereum's older and higher-cost technology, "bullish on Solana and other new public chains, bearish on Ethereum" has become a mainstream idea.

Challenging Token Economy

In recent years, Ethereum has actively expanded L2 transaction volume rather than the core L1, which has been hugely successful, with L2 activities like Base, Arbitrum, and Optimism surging.

However, the rise of L2 has led to Ethereum's revenue dropping to a four-year low, and many are questioning whether developing L2 is counterproductive.

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Underperforming ETFs

Ethereum spot ETFs have not achieved overwhelming success like Bitcoin ETFs, with ETFs raising billions of dollars but also offset by the $2.7 billion outflow from Grayscale ETHE.

Grayscale ETHE unlocking coming to an end, Ethereum ETF poised for a turnaround

Ethereum Dominates Most Major Crypto Applications

Matt Hougan believes the above are valid reasons to worry about Ethereum, but he also thinks this overlooks a broader perspective.

Ethereum, Solana, and other public chains are all trying to create a "public computer" - a global database that everyone can use and develop applications on. But when you look at which applications are achieving breakthrough success, you'll find they are mostly dominated by Ethereum:

• Stablecoins: Over half of stablecoins are issued on Ethereum.

• DeFi: Over 60% of all DeFi assets are locked on Ethereum.

• Polymarket: The groundbreaking prediction market ultimately settled on Ethereum.

There are many more examples.

Matt Hougan pointed out:

When BlackRock wanted to create a tokenized money market fund this year, they chose Ethereum, which now manages over $500 million in assets; when Nike launched the Web3 creative platform called .Swoosh, they chose Ethereum. When the next major traditional company wants to develop a blockchain product, I bet they will also choose Ethereum.

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The Microsoft of Blockchain

Matt Hougan continued to list Ethereum's various positives:

• Market value five times larger than its main competitors

• Has the most active developers and users

• The only programmable blockchain with some regulatory support in the U.S.

• Has a thriving regulated futures market and a billion-dollar ETF market

He concluded:

Ethereum is like the Microsoft of blockchain. Everyone wants to talk about Google, Slack, and Zoom, thinking these apps bring revolutionary technology, but Microsoft is still bigger than these companies. This doesn't mean I'm not bullish on public chains like Solana; they are making significant impacts and have many positives, but I think people are too quick to overlook the success Ethereum and its ecosystem have already achieved in the real world. In my view, Ethereum's challenges are minor, and its opportunities are emerging. When the election nears or any regulatory clarity emerges, the market will reassess Ethereum, making it look more like a potential contrarian bet by the year-end.