The claim that Ethereum (ETH) is turning into a "dead investment" due to greedy second layers

The drop of Ether against Bitcoin to its lowest level in five years has led analysts to label it as a "dead investment." The claim that Ethereum (ETH) is turning into a "dead investment" due to greedy second layers

One of the leading crypto venture capitalists stated, "The decrease in Ether's attractiveness as an investment at ETH ₺70,097 is due to the loss of value of second layers from the main network and the lack of community reaction against excessive token creation." Castle Island Ventures partner Nic Carter said in a March 28 X post, "The primary reason for this is the greedy Eth second layers pulling value from the first layer and the social consensus towards excessive token creation."

Ether "committed suicide"

"ETH was buried under the avalanche created by its own tokens. It died by its own hand," Carter said. He made this remark in response to Lekker Capital founder Quinn Thompson's claim that Ether as an investment has "completely died."

Quinn Thompson said in a March 28 X post, “A market cap of $225 billion seeing declines in transaction activity, user growth, and fees/revenue. There is no investment situation here. Is it a useful network? Yes. As an investment? Absolutely not,” he said.

The ETH/BTC ratio (which shows Ether's relative strength against BTC ₺3,172,128) is at approximately 0.02260, the lowest level in nearly five years according to TradingView data.

At the time of publication, Ether is trading at $1,894, down 5.34% in the last seven days according to the data. Ether has experienced a 17.94% decline in the last 30 days. Meanwhile, Magazine reported that in September 2024, Ethereum's fee revenue has "collapsed" by 99% in the previous six months as second layers absorb all users, transactions, and fee revenues while contributing nothing to the base layer.