Ethereum Experiencing "Midlife Crisis," According to Standard Chartered Analysts

Analysts from Standard Chartered have suggested that Ethereum is undergoing a "midlife crisis," as the cryptocurrency struggles to maintain its value around $2,000.

Ethereum (ETH), the world's second-largest cryptocurrency by market capitalization, appears to be in a state of limbo as it gives away its value for free to layer-2 networks while failing to retain investor interest. The cryptocurrency has lost 40% of its value in the past three months, leading Standard Chartered analysts to describe the network as facing a "midlife crisis."

In an interview with the Financial Times, Geoff Kendrick, Standard Chartered's head of digital assets research, stated that the network "gave away value for free" as layer-2 networks have "essentially commoditized" Ethereum.

Currently, Ethereum is facing challenges in preventing its price from falling further. At the time of writing, ETH is trading at around $2,054, after falling to $1,813 earlier in March. According to Adam McCarthy, a research analyst at Kaiko, the decline may be due to the fact that Ethereum "is just not interesting to most people."

"It's hard to get too excited about amazing feats of engineering when there [are] so many competing things now in the attention economy."

Adam McCarthy

At the same time, Ethereum's developers are grappling with internal disagreements, and user activity on the network has not increased, as noted by Carol Alexander, a finance professor at the University of Sussex. She added that the decentralized finance (DeFi) vision now seems "much further away now than a year ago" and that decision-making in the Ethereum community has become "a bit of a shambles."

Recently, the direction of Ethereum has come under scrutiny, with even former Ethereum Foundation engineer Harikrishnan Mulackal criticizing the network's governance, saying it suffers from a "lack of a clear and cohesive vision."

Mulackal suggested that without stronger leadership, Ethereum could stagnate, recommending that the network should aim for faster updates and release "one hard fork each quarter." Otherwise, he warned, Ethereum risks reproducing "exactly the same result" as the past five years.