Ethereum ‘commoditized itself’ by shifting value to layer-2s, Standard Chartered says

Standard Chartered analysts say Ethereum is going through a “midlife crisis,” with $ETH struggling to hold around $2,000.

Ethereum ($ETH) has seemingly stuck in limbo as it’s giving away its value for free to layer-2 networks while struggling to keep investors interested. The world’s second-largest cryptocurrency by market capitalization has dropped 40% in the past three months, with Standard Chartered analysts now saying the network if facing “midlife crisis.”

In an interview with the Financial Times, Standard Chartered’s head of digital assets research Geoff Kendrick said the network “gave away value for free” as with layer-2 networks Ethereum has “essentially commoditized itself.”

Now, Ethereum is struggling with keeping its price from falling even further. As of press time, $ETH is trading at around $2,054, after plunging to $1,813 earlier in March. Kaiko’s research analyst Adam McCarthy says the decline might be tied 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 struggling with internal disagreements, and user activity on the network hasn’t picked up, noted Carol Alexander, a finance professor at the University of Sussex. She added that the decentralized finance vision now feels “much further away now than a year ago” and that decision-making in the Ethereum community has become “a bit of a shambles.”

Ethereum’s direction has been under scrutiny lately as even former Ethereum Foundation engineer Harikrishnan Mulackal criticized the network’s governance, saying it suffers from a “lack of a clear and cohesive vision.”

Per Mulackal, without stronger leadership, Ethereum could stagnate, suggesting that the network should push for faster updates and ship “one hard fork each quarter.” Otherwise, he said, Ethereum risks reproducing “exactly the same result” as the past five years.