Ethereum’s new mission
Since the launch of the US Bitcoin exchange funds, BTC has made its way into almost every type of investor’s portfolio. This is reflected in the price gains since then, and in the lagging performance of altcoins. Meanwhile, Ethereum is still searching for direction and momentum. Where could it come from? Find out in this edition of Bitvavo Market News.
Market update
Just two years ago, investing in Bitcoin was really only an option for private investors and a few adventurous professionals. Then came the launch of Bitcoin exchange-traded funds (ETFs) from the likes of BlackRock. This was followed by the creation of a strategic Bitcoin reserve by the United States. These developments made Bitcoin a legitimate part of any investment portfolio.
In October last year, Eric Balchunas, ETF expert at Bloomberg, summed it up well: “Every institution type is now represented: endowment, bank, hedge funds, insurance companies, pension funds, private equity, holding companies, venture capital, trust, family office, and brokerage. Absolutely insane feat for a category less than a year old, akin to winning all four tennis grand slams before a 16th birthday.”
The price of Bitcoin reflects this development. Since January 1, 2024, just before the launch of ETFs, the price had risen by around 150%. The rest of the crypto market has lagged behind. The index ‘OTHERS’, which tracks coins ranked 11 to 125, is up just 10% in euro terms since the start of 2024.
Could altcoins be due for a catch-up rally? The charts aren’t looking bad. If the recent correction of the past four weeks is behind us, we may be seeing a higher low (HL) and a similar setup to what we saw in October 2023 and November 2024. In both cases, a significant rally followed.
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Ethereum's New Mission
The Ethereum Foundation (EF) has shut down its Protocol R&D division and replaced it with a new branch: “Protocol”. The name change comes with an organizational restructuring and a strategic focus on three main goals: scaling Ethereum’s base layer (L1), cheaper and faster blobs for rollups (L2s), and improving the user experience.
The changes are more than cosmetic. Leadership roles have been reshuffled, teams reorganized around strategic goals, and some staff have moved on. The message is clear: Ethereum needs to move faster, prioritize more clearly, and collaborate more effectively.
At the heart of this shift lies a long-standing identity struggle within Ethereum. Is it a neutral protocol or a financial platform? Is ETH money, a productive asset, or both? Should Ethereum remain politically neutral, or embrace its cultural and commercial successes — from memecoins and markets to internet memes?
Critics speak of an identity crisis: Ethereum is trying to be too many things at once, with unclear communication, erratic monetary policy and a culture that sometimes hesitates to fully embrace commercial growth. Others see Ethereum’s broad scope as a strength; just as the internet does not need a clear identity to be useful to everyone, Ethereum isn’t a product; but an infrastructure upon which anything can be built.
The EF seems to recognize this. In previous blog posts, its new directors have described Ethereum not as a monolith, but as a network of networks. Their job now is to strengthen the network without suffocating the wider ecosystem. With the new Protocol team, the foundation is taking a more pragmatic route: less vague idealism, more focus on delivery.
Will that be enough to resolve Ethereum’s internal tensions? In the end, there may only be one deciding force: the direction of the ETH price.
Other news
Circle has gone public, stock skyrockets 168%. The issuer of stablecoin USDC announced on Thursday its debut on the NYSE, with a valuation of over $18 billion. Circle raised $1.1 billion and was met with strong investor demand. Wall Street seems ready for regulated stablecoins; now it’s up to the politicians to catch up.
Bitcoin Core developers call for user freedom and restraint. A group of 31 Bitcoin Core developers released a statement arguing that Bitcoin should not dictate which transactions are “acceptable”, as long as they are technically safe. The post sparked heated debate. Critics such as Samson Mow and Luke Dashjr see it as a green light for spam, while others praised the stance as essential for censorship resistance.
Apple, Google, X and Airbnb are in talks with crypto companies about stablecoin integration into their payment systems. The goal: cut transaction fees and improve the efficiency of cross-border payments. Google Cloud already accepts PayPal’s PYUSD stablecoin, while X is working with Stripe on stablecoin functionality. Airbnb is in talks with Worldpay, and Apple is exploring integration with Circle’s USDC.
Japan's Metaplanet aims to raise $5.4 billion to increase Bitcoin reserve from 8,888 to 210,000 BTC. Following the announcement, shares jumped 22% on Monday. The company is following in the footsteps of Michael Saylor’s Strategy, financing the purchases through, among other things, stock offerings. Metaplanet aims to hold almost 1% of all Bitcoin in circulation by 2027.
Satoshi Radio: In the latest episode of Satoshi Radio, the hosts review the biggest Bitcoin event of the year. What were the main topics in Las Vegas? Listeners pose questions about topics such as mining, Bitcoin units and Menger’s view on HODL'ing. The episode concludes with a cautiously optimistic market update.
This article is for informational purposes only and does not constitute a marketing communication or recommendation. None of the content herein should be considered as investment advice or a substitute for it. Bitvavo makes no guarantees regarding the accuracy or completeness of the provided information. Investments involve risks. There is a possibility of losing your entire invested capital.