The value and price of Ethereum

During the interactive session of the online communication last Saturday, I tried for more than ten minutes but couldn't properly add the audience members who wanted to speak. During this time, I also tried to send speaking invitations to a few audience members, but there was no response. It is likely that there was a problem with my network, so I ended the communication.

I originally thought about using other commonly used online tools in the country for online communication, but considering that the topics we are discussing do not have a clear positioning at the moment and there are significant risks, I also don't want to be too stiff during the communication, so I didn't consider this option and could only choose Twitter.

However, the last two Twitter communications encountered various problems, and it seems that this tool is not very user-friendly. As for what will happen in the future, I'll think about it.

In the next few articles, I will select some questions from readers that I think are important and share more details.

In the reader comments, a reader asked the following question:

The U.S. is set to issue a large amount of stablecoins, most likely within the Ethereum ecosystem. Why is the price of Ethereum not showing any signs of improvement?

The core of this issue is measuring the value of a project using the fluctuations in short-term coin prices, as well as assessing the value of a certain positive factor during the project's advancement.

I also pay attention to the price of a project, but I do not look at the short-term price of a project; I will not use the fluctuations of its short-term price to measure the current value of the project and whether a certain positive news is valuable.

What is short-term price?

Whether it will rise or fall tomorrow, whether it will rise or fall next week, whether it will rise or fall next month, in my opinion, are all short-term prices.

There are countless cases that prove the short-term performance of the market is often irrational. I will try to eliminate the influence of this irrationality on my emotions and will try to ignore this irrationality or make use of it.

The market's short-term irrationality cannot reflect the value of the project, nor can it directly feedback the project's price, which is perfectly normal; this is how the market behaves most of the time.

However, in the long run, the market will certainly reflect the true value and price of a project at some point.

How long is this "long term"?

I remember sharing in a previous article:

Duan Yongping consulted Buffett on this issue, and his own experience is about 3 to 4 years.

In other words, if a project truly has substantial benefits, within 3 to 4 years, these benefits will definitely be reflected in the price.

I am currently using Duan Yongping's method to ignore the short-term price fluctuations of the market.

Since short-term price fluctuations can distort the true value of a project, what actually supports the true value of the project?

It refers to the fundamentals of the project.

So now I only focus on the fundamentals of the project and information related to the fundamentals, and I hardly look at the project's daily price anymore.

If we measure Ethereum based on fundamentals and related information, the above news, as well as some recent Wall Street companies starting to publicly purchase Ethereum, are undoubtedly positive for Ethereum.

Tom Lee recently had an interview with CNBC. In this interview, I feel that a lot of the rhetoric is aimed at Wall Street, urging them to buy Ethereum; I regard it as an advertisement, but there is one statement that I think is very practical and to the point.

That is what he believes the bank will buy next, Ethereum.

Because in the future, it is very likely that a large number of banks and financial institutions will issue stablecoins and carry out related businesses (such as RWA) on the Ethereum ecosystem. For example, there are currently reports that Deutsche Bank is testing Ethereum Layer 2 scaling based on ZK technology.

If these banks want to issue stablecoins or conduct business on Ethereum and its related ecosystem, they will undoubtedly pay attention to the security of Ethereum and its related ecosystem. The most direct way to ensure the security of Ethereum and its related ecosystem is to purchase Ethereum and become a node to participate in the maintenance of network security.

All of these are positive factors for the fundamentals of Ethereum. If we believe that these positives will definitely be realized by the market, then there is no need to worry about the future price of Ethereum.

As for when this price will be realized, we should still be patient and wait. I believe it won't take 3 or 4 years, but don't expect it next week or next month.