Ethereum Investment Thesis Under Fire as Hedge Fund CIO Declares It “Completely Dead”

Lekker Capital CIO Quinn Thompson claims Ethereum is “completely dead.” The rise of Layer-2 solutions like Arbitrum and Optimism is shifting value away from Ethereum’s mainnet. Despite bearish views, Ethereum’s 2024 fee income grew 3% year-over-year. Ethereum is experiencing renewed criticism from institutional investors following a sharp decline in network usage and fee revenue. Lekker Capital hedge fund Chief Investment Officer Quinn Thompson has recently termed Ethereum “completely dead” as an investment based on a continuous decrease in network usage, user additions, and fee revenues. Ethereum Fee Revenue Drops 95% Since Peak Ethereum’s fee revenue has seen a sharp decline over the past three years. In Q1 2025, the network is predicted to generate just $217 million in fees, down from $4.3 billion in Q4 2021—a 95% drop. On-chain metrics, including active addresses and transaction volume, have also decreased drastically, raising concerns about the asset’s long-term value proposition. “The data speaks for itself,” said Thompson. “Investor returns are being diluted, and usage has shifted elsewhere.” Layer-2 Growth Disrupting Ethereum’s Monetization The development of Layer-2 (L2) scaling technologies is introducing complexity into Ethereum’s investment thesis. While L2 chains like Arbitrum and Optimism have improved scaling and decreased user costs, they’ve also drained volume away from Ethereum’s mainnet. The Dencun upgrade, implemented in March 2024 as reported by ETHNews, further accelerated this migration by reducing Layer-2 transaction fees through the introduction of blobspace (EIP-4844), which led to lower fees for users transacting off-chain. Castle Island Ventures partner Nic Carter shared this opinion as well, noting that Layer-2 solutions are “siphoning value” from Ethereum and, in the process, reducing ETH’s use as a capital asset. Analysts Point to Resilience in Core Metrics Despite the bearish outlook from some investors, others argue the network’s fundamentals remain strong. Omid Malekan, an adjunct professor at Columbia Business School, said that Layer-2 networks are a natural evolution in Ethereum’s roadmap and won’t necessarily degrade Ethereum‘s value in the long term. In 2024, Ethereum’s total fee revenue increased by 3% year-over-year to $2.48 billion. This growth is a reflection of the continued demand for blockspace, even as the architecture evolves. Ethereum also remains a dominant force in decentralized application (dApp) development and continues to maintain the lead as one of the largest developer ecosystems in crypto. With the transition to Proof of Stake and ongoing protocol improvements, Ethereum is viewed by some as a mature platform and not a dying one. The post Ethereum Investment Thesis Under Fire as Hedge Fund CIO Declares It “Completely Dead” appeared first on ETHNews. in a formal or creative style, maintaining a 500 word count. You must only respond with the modified content. Change the tone of my title “Lekker Capital CIO Quinn Thompson claims Ethereum is “completely dead.” The rise of Layer-2 solutions like Arbitrum and Optimism is shifting value away from Ethereum’s mainnet. Despite bearish views, Ethereum’s 2024 fee income grew 3% year-over-year. Ethereum is experiencing renewed criticism from institutional investors following a sharp decline in network usage and fee revenue. Lekker Capital hedge fund Chief Investment Officer Quinn Thompson has recently termed Ethereum “completely dead” as an investment based on a continuous decrease in network usage, user additions, and fee revenues. Ethereum Fee Revenue Drops 95% Since Peak Ethereum’s fee revenue has seen a sharp decline over the past three years. In Q1 2025, the network is predicted to generate just $217 million in fees, down from $4.3 billion in Q4 2021—a 95% drop. On-chain metrics, including active addresses and transaction volume, have also decreased drastically, raising concerns about the asset’s long-term value proposition. “The data speaks for itself,” said Thompson. “Investor returns are being diluted, and usage has shifted elsewhere.” Layer-2 Growth Disrupting Ethereum’s Monetization The development of Layer-2 (L2) scaling technologies is introducing complexity into Ethereum’s investment thesis. While L2 chains like Arbitrum and Optimism have improved scaling and decreased user costs, they’ve also drained volume away from Ethereum’s mainnet. The Dencun upgrade, implemented in March 2024 as reported by ETHNews, further accelerated this migration by reducing Layer-2 transaction fees through the introduction of blobspace (EIP-4844), which led to lower fees for users transacting off-chain. Castle Island Ventures partner Nic Carter shared this opinion as well, noting that Layer-2 solutions are “siphoning value” from Ethereum and, in the process, reducing ETH’s use as a capital asset. Analysts Point to Resilience in Core Metrics Despite the bearish outlook from some investors, others argue the network’s fundamentals remain strong. Omid Malekan, an adjunct professor at Columbia Business School, said that Layer-2 networks are a natural evolution in Ethereum’s roadmap and won’t necessarily degrade Ethereum‘s value in the long term. In 2024, Ethereum’s total fee revenue increased by 3% year-over-year to $2.48 billion. This growth is a reflection of the continued demand for blockspace, even as the architecture evolves. Ethereum also remains a dominant force in decentralized application (dApp) development and continues to maintain the lead as one of the largest developer ecosystems in crypto. With the transition to Proof of Stake and ongoing protocol improvements, Ethereum is viewed by some as a mature platform and not a dying one. The post Ethereum Investment Thesis Under Fire as Hedge Fund CIO Declares It “Completely Dead” appeared first on ETHNews.” for a more friendly approach. Keep the content length about the same. You must only respond with the modified content.