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Ethereum (ETH) may be experiencing a major drawdown at the moment, however, on-chain data points to a potential run in price in the short to mid-term.

According to on-chain market analyst, Ali Martinez, Ethereum currently has no significant barrier ahead of it judging by the In and Out of the Money Around Price indicator from crypto analytics platform IntoTheBlock.

This data shows that a total of 7.82 million addresses or 65.4% of the total wallets in the network are in the money, or profitable at the moment. This is compared with the 4.13 million addresses or 34.5% that are out of the money or in losses. Ethereum holders that are at break-even points or At The Money are just approximately 12,430 or 0.10% of the total wallets in the network.

To Martinez, since there are no supply barriers in sight, Ethereum could ultimately soar as high as $2,700 in the short term, a level beyond the $2,500 conservative projection. Should this feat be achieved, Ethereum would be retesting a price level last seen in early May 2022.

This price call, though ambitious, is a big shift from current reality. At the time of writing, Ethereum was trading for $2,310.95, up by 0.28% in the past 24 hours as it tries to wriggle away from the mild losses accrued as the new year unfolds. Over the past week, Ethereum has still maintained a mildly bullish outlook, having surged by 1.12%.

Ethereum is facing an existential threat from some of the key rivals that surround it including Solana (SOL), XRP Ledger, Avalanche (AVAX), and Cardano (ADA) to mention a few.

While the growth of Ethereum has been relatively poor compared to these alternatives, Solana has expanded its influence over the former with the visible flippening happening to DEX volumes and other core areas.

In addition, Solana has recorded a more bullish price action when compared to the past year as SOL jumped as high as 989% while Ethereum has only managed to print 94.16% over the past year. Other chains like Cardano and the XRPL are also innovating in a way that proves they are fully ready to evolve in the coming months.

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Ethereum (ETH) Metrics Hints Readiness for Huge Gains - CoinGape

In a recent interview, Vitalik Buterin, the co-founder of Ethereum, articulated the challenges and the evolving vision of Ethereum, juxtaposing it against the aspirations of Solana Labs co-founder Anatoly Yakovenko. Buterin, reflecting on the dual role of cryptocurrency in resisting centralized powers and fostering new democratic models, pointed out the playful nature of Ethereum.

Despite the heavy implications of blockchain in areas like democracy, Buterin quipped, In Ethereum, the worst thing that happens is people lose money.

Buterins concerns center around the need for protocol upgrades in Ethereum. Particularly those of a technical nature, which he believes are usually left to the core developers. He differentiated these from economic upgrades, such as the shift from Proof of Work to Proof of Stake, which have wider implications and require broader consensus.

Protocol changes where the core developers themselves dont know if the community is going to be willing to go for a particular proposal is a very real concern.Within Ethereum, a lot of people sometimes think that core developers are kind of dictators and they have this agenda, but the reality is often the opposite, Buterin emphasized.

2023 marked a significant year for Ethereum, with rollups enhancing scalability and security. According to Buterin, these technological advancements could potentially allow up to 100,000 transactions per second. However, he cautioned about rollups complexity and potential vulnerabilities, underscoring the importance of ensuring their safety.

Security, a crucial aspect of Ethereums ecosystem, is addressed through innovations like light clients and account abstraction. Moreover, Buterin emphasized the importance of these developments in enhancing wallet security, multi-signature systems, and quantum-proof technologies.

Buterins vision for Ethereum in 2024 is optimistic, foreseeing advancements in scalability, user experience, and security. He anticipates significant progress in rollup technology and the implementation of EIP-4844, which would expand Ethereums data capacity.

In a blog post, Buterin reminisced about the early days of crypto and Ethereums role in fostering a decentralized internet. He lamented the shift in focus since 2017, with high transaction fees skewing blockchain usage towards financial motives, overshadowing Ethereums foundational ideals.

These visions have faded somewhat into the background. Few talk about consumer crypto payments, the only non-financial application that is actually being used at a large scale on-chain is ENS, and there is a large ideological rift where significant parts of the non-blockchain decentralization community see the crypto world as a distraction, and not as a kindred spirit and a powerful ally, Buterin highlighted.

Still, Buterin remains hopeful, with core scaling solutions and privacy enhancements aligning Ethereum with its original values.

In response to Buterins insights, Anatoly Yakovenko, co-founder of Solana Labs, shared his ambitious goals for Solana. Yakovenko envisions Solana as a high-performance execution engine, prioritizing speed and efficiency.

He aims to make Solana the best in class at synchronizing states at lightning speeds, complementing Ethereums role as a robust settlement layer.

Make Solana even faster. A world where Ethereum succeeds as a cockroach settlement layer needs a high-performance execution engine that is best in class at synchronizing state at the speed of light, Yakovenko said.

Read more: Solana vs. Ethereum: An Ultimate Comparison

Yakovenkos focus is on performance optimization, striving to establish Solana as a leader in blockchain technology. His vision embodies a future where Solana and Ethereum coexist, each excelling in their respective domains of speed and decentralization.

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Vitalik Buterin Lays Out the Challenges Ethereum Faces in 2024 - BeInCrypto

Make no mistake about it, Solana (SOL -3.23%) is ending the year with a bang. Up more than 900% in 2023, Solana recently passed XRP (XRP -1.03%) to become the fifth-most valuable cryptocurrency in the world. Solana now has a $43 billion market cap, and appears to be growing much faster than anyone could have predicted a year ago.

So just how much higher can Solana go? There's now a case to be made that Solana is on pace to pass Ethereum (ETH -0.36%) to become the second-most valuable cryptocurrency, trailing only Bitcoin (BTC -0.15%). That would represent a huge paradigm shift in the crypto world, given that Ethereum has historically played the role of "digital silver" to Bitcoin's "digital gold." Yet there are already signs that this paradigm shift is underway. Let's take a closer look.

The first evidence of this potential paradigm shift comes from the world of non-fungible tokens (NFTs), an area where Ethereum has traditionally dominated. The two most famous NFT collections -- the Bored Ape Yacht Club and the CryptoPunks -- are found on the Ethereum blockchain. Historically, they have been the most popular collections for NFT trading and have been reliable benchmarks for how the overall NFT market is performing.

Image source: Getty Images.

Yet they are no longer the market leaders. The last time I checked, a frog-themed NFT collection for the Solana blockchain had passed the Bored Ape Yacht Club in terms of 24-hour sales volume. And other Solana NFT collections are performing well over longer seven-day and 30-day windows. In fact, according to CryptoSlam data, Solana is nearly tied with Ethereum in terms of 30-day NFT sales volume.

Much the same story is true in the world of decentralized finance (DeFi), where Solana appears to be narrowing the gap. This is also an area where Ethereum has historically dominated. But at the end of December, Solana passed Ethereum in terms of DeFi for the first time ever.

Over both a seven-day and 24-hour period, decentralized exchanges on the Solana blockchain saw more trading volume than decentralized exchanges on the Ethereum blockchain. This is particularly striking, given that Solana has never made DeFi a core priority. Granted, much of this volume appears to be coming from the buying and selling of Solana meme coins, but it's still interesting to note.

Moreover, institutional investors appear to be lining up behind Solana as well. According to CoinShares, which tracks institutional money flows out of various cryptos, the pattern throughout 2023 has been the influx of new money into Solana. At the same time, these large institutional investors appear to be scaling back their exposure to Ethereum.

As a signal of this institutional buy-in, Cathie Wood of Ark Invest recently appeared on CNBC talking up the merits of Solana vis-a-vis Ethereum. Simply stated, Solana is a faster, more cost-effective version of Ethereum, and so it only makes sense that it should be gaining market share in key areas. Shouldn't the best technology win? If that's the case, then the valuation of Solana could soar.

Although Solana does appears to be gaining ground on Ethereum, a huge chasm in market cap still separates them. While Solana has a market cap of $43 billion, Ethereum has a market cap of more than $280 billion. For Solana to pass Ethereum in market cap, something extraordinary needs to happen, beyond just the capture of a few points of market share in the world of NFTs or DeFi.

And investment firm VanEck seems to have the answer. That "something extraordinary" is the launch of a killer app for the Solana blockchain that is capable of onboarding 100 million users. That number might sound preposterous, but keep in mind it only took ChatGPT two months to acquire that many users this year.

If Solana finds that killer app, says VanEck, its future price could skyrocket by more than 10,000%. Assuming that Solana continues to gain share at the expense of Ethereum in key market niches, VanEck projects that the price of Solana could approach $3,200 by 2030 compared with today's price of about $100.

If you multiply that price of $3,200 by Solana's current circulating coin supply of about 429 million, that gives you a figure of $1.4 trillion as a projected market cap. So a valuation of more than $1 trillion is certainly within grasp for Solana. That's the ultimate bull case scenario, of course, but it's still interesting to consider.

If you are thinking about investing in Solana, keep a close eye on metrics that show that Solana is indeed narrowing the gap with Ethereum. Tracking the sales numbers of digital frogs or digital apes might sound silly, but data like this could signal whether a real paradigm shift is underway. Several years from now, analysts might be talking about Solana as the next trillion-dollar asset.

Dominic Basulto has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Solana, and XRP. The Motley Fool has a disclosure policy.

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Forget XRP, This Unstoppable Crypto Is Now on Pace to Topple Ethereum and Become the Next Trillion-Dollar Asset - The Motley Fool

One rival of smart contract platform Ethereum (ETH) is shifting its culture to focus on promoting tokens it says are inspired by internet culture and humor.

In a new announcement, layer-1 blockchain Avalanche (AVAX) says that it intends to start promoting its Culture Catalyst initiative, which launched last year and aims to support memecoins, gas tokens, non-fungible tokens (NFTs), stablecoins, Real World Assets (RWA), and governance coins.

Last year, the Avalanche Foundation launched Culture Catalyst, a program aimed at empowering creators, sparking innovation, and propelling the adoption of blockchains.

This initiative seeks to better position Avalanche to cultivate and support the many new forms of creativity, culture, and lifestyle that blockchain enables.

Avalanche says it plans on purchasing select AVAX-based meme assets to start a collection, and says it will be choosing the tokens based on a combination of factors, including but not limited to its number of holders, its liquidity thresholds, and overall social sentiment.

The Avalanche Foundation intends to start using Culture Catalyst to recognize and encourage the culture and fun symbolized by meme coins by purchasing select Avalanche-based memecoins to create a collection.

This move complements the Avalanche Foundations ongoing engagement across the Avalanche ecosystem, including NFTs, RWAs, and other types of crypto assets, broadening its portfolio to embrace a more complete spectrum of possibilities.

The initiative was originally created in March 2022 as a collaboration between Avalanche and OP3N, an artificial intelligence (AI)-powered chat application.

AVAX is trading for $40.13 at time of writing, a fractional decrease during the last 24 hours.

Featured Image: Shutterstock/Ellerslie/Dario Lo Presti

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Avalanche (AVAX) To Go Ape? Ethereum-Rival Aims To Promote Memecoins With New Culture Catalyst Initiative - The Daily Hodl