Ethereum can’t be ignored
Listening to Consensus this week and reading the analysis in the Financial Times and Wall Street Journal over the weekend, it was apparent to me that Ethereum is causing mainstream financial analysts a lot of problems.
The market cap of Ethereum means it can’t be ignored, the price volatility means up or down, the volume of people using the Ethereum network only keeps increasing, as do the use cases. My favourite non-Nobel prize winning economist, Method Man, framed it elegantly when he sang, “Cash Rules Everything Around Me” (C.R.E.A.M.) This is why, despite inherently being suspicious of it, Ethereum is now becoming part of the core financial news all the time, not simply a weekly piece on a price collapse or surge. This is only going to increase:
So what is the news beyond the price volatility? I think Isaiah Berlin’s analogy of the Fox and Hedgehog helps us categorise the news. Berlin asks us to divide writers and thinkers into two categories: Hedgehogs, who view the world through the lens of a single defining idea, and Foxes, who draw on a wide range of experiences and for whom the world cannot be boiled down to a single idea. Both have their merits.
Ethereum Hedgehogs tend to be maximalists, whose single idea is that the network utility will become all encompassing, much like the Internet, full stop. Ethereum Foxes (Coindesk et al) think about the importance of the Altair and London upgrades, energy efficiency, NFTs, DeFi and also of the ups and downs of price. I invite readers to choose the animal that best represents them. For my part I want to be a fox, but in all honesty, I’m a hedgehog.
What I really look forward to, are the foxes finding a voice in the Economist, FT and WSJ, and talking about the network activity as a whole. Not simply a 30% drop or increase in price, but using the data available in glassnode and elsewhere, to analyse the loan to value ratio in DeFi, the total number of transactions, new addresses, on exchange and off exchange activity.
Or, as Method Man might say, “Tryin’ to get a clutch at what I could not touch.”
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