Why I Stay Heavily Allocated to Ethereum During Weak Price Action

In this bull market, Ethereum has lagged, has not yet reclaimed its all-time high, and negative headlines keep piling up. I share why I remain heavily allocated and which long-term fundamentals still support my conviction.

Stuck Price Action Isn't the Whole Picture

Bitcoin has smashed past $100K, Doge and Solana are riding high, but Ethereum is stuck. People are starting to wonder if ETH missed the memo on this bull run, or if it is quietly auditioning to be the next stablecoin. That joke has been floating around, and it stings because the chart tells a frustrating story. When Bitcoin was at $40K, ETH was around $3,000. When Bitcoin hit $70K, ETH was still around $3,000. Now that Bitcoin is trading near six figures, ETH has barely moved above $3,000. Add a wave of negative rumors flooding the market, and the frustration becomes easy to understand.

I personally hold quite a bit of ETH. It is my second-largest position after Bitcoin, and I stake most of it, including through Lido, for steady returns. Stability is better than crashing, but I want more than stability. I want growth, and right now ETH is not delivering that. So let me walk through the main criticisms and explain why I still stay allocated.

Slow and Expensive? Demand Tells a Different Story

The most common complaints about Ethereum are that the network is slow and expensive. Looking at this year's data, Ethereum's transaction fees have ranged from $2 to $8 on average, occasionally dipping to around $0.50, but in peak times they have spiked to as much as $30. Compare that with Solana, where the average transaction fee is about $0.003. Speed is another sore point: Ethereum's average TPS is roughly 30, while Solana clocks in at 4,000 to 45,000 TPS. At first glance, high fees and slow speed make ETH look bad.

But hold on. What do high transaction fees actually mean? They show that demand for the Ethereum network is massive. The fee mechanism helps prevent overloads that could crash the network. It is not ideal, but the fact that so many people are willing to pay high fees to keep using Ethereum proves its value.

Upgrades are coming. In 2025, Ethereum will roll out its Pectra upgrade, split into two phases. The first phase is set to launch in early 2025 and brings some user-friendly changes. The most exciting part: you will no longer need ETH to pay for gas fees. Instead, you can use other tokens like USDC or DAI, and even have third-party services sponsor your gas fees. This small change removes friction and makes Ethereum much more user-friendly. Ethereum is still the world's second-largest cryptocurrency by market cap and remains the top smart contract platform. The upgrades have been slow, but Pectra could be a game changer. Some even predict Ethereum's transaction speed could rival Visa in the coming years, and that is before considering what L2s already offer.

Ethereum ETFs: Outflows Miss the Bigger Approval

Ethereum's ETFs have not been doing great. BlackRock and Fidelity's Bitcoin ETFs, IBIT and FBTC, raised $4.2 billion and $3.5 billion respectively within the first 30 days of listing. After Ethereum's ETFs launched, they not only failed to attract inflows, they actually experienced outflows worth hundreds of millions of dollars. A lot of people call this a bad sign.

I don't think so. Ethereum is the only cryptocurrency besides Bitcoin that the SEC has approved for an ETF so far. That alone is remarkable. No other altcoin has received such recognition; they all got rejected. On December 21, the SEC even approved the first hybrid Bitcoin and Ethereum ETF. Ethereum spot ETFs are still maintaining net inflows overall as institutional players enter the crypto space and prioritize assets with long-term investment value.

There is another important point. One reason many people are not buying the ETH ETF right now is staking. Many investors prefer staking ETH, for example on Lido, rather than simply holding the spot ETF, because staking generates returns. From this perspective, the current state of ETH ETFs makes a lot of sense. The fact that Ethereum has SEC, government, and institutional approval is already a massive win in my book.

Narratives Are Cyclical: DeFi Will Return

A lot of money in the market follows innovation. Think about the years when Ethereum's market cap exploded. The hottest trends back then were DeFi, the metaverse, and NFTs, all of which were built primarily on Ethereum. But in the past two years, the meme sector has absolutely dominated, and memes thrive on high-performance blockchains with low gas fees, like Solana. Ethereum, with its slower speeds and higher fees, just doesn't fit that narrative.

But narratives and trends are cyclical. They follow cycles. If you look closely, DeFi and NFTs are already starting to make a comeback. When it comes to long-term investment, would you rather put your money into memes or DeFi? If you are an institution, would you prefer Ethereum, known for its stability, or a meme token that pumps for a minute and then disappears?

Even if we are talking about meme coins, Ethereum has its own popular ones too, like Pepe and Shib, which are well-known and hold significant market value. Ethereum layer 2s also have promising meme coins. For example, on Base, an Ethereum L2, there is Toshi. Just recently, Coinbase announced plans to list Toshi in their updated roadmap. Coinbase is no small exchange, and that is a solid win for Ethereum's ecosystem. That is why I believe that while Ethereum's narrative might feel weak in 2024, it is set for a strong comeback in 2025 and 2026.

The Real Issue: Internal Governance and Drama

Beyond the technical and financial factors, Ethereum's internal conflicts have also become a reason some people distrust it. Honestly, I think this is Ethereum's biggest issue. I am generally optimistic about the other problems, but internal drama is the part I dislike the most.

Having someone represent a blockchain, like Vitalik Buterin for Ethereum, has both pros and cons. Back in the day, Vitalik was called V God, not just because of his technical brilliance, but also because of his charisma and the pivotal role he played in building trust and belief in Ethereum and the broader crypto ecosystem. Over the past year, that belief has started to fade. That fresh sense of excitement is gone.

In my opinion, Vitalik and the Ethereum Foundation now have too much influence over Ethereum. Bitcoin's strength lies in its community and users. Ethereum has matured enough for the community to take control; it should not be so heavily influenced by one person or one organization. Core developer Lane Rettig tweeted: "Ethereum governance has failed. We are effectively a technocracy, a small group of technical experts, the core developers, have the final say on protocol updates." Every time a developer vents about Ethereum's roadmap on Twitter, it hurts. Every time Vitalik or the Ethereum Foundation sells, it is painful. This drama is unhealthy, and I don't have a positive spin for it. Ethereum is still the world's second-largest cryptocurrency, which shows these problems may not be too critical yet. But I sometimes wonder if it is precisely because Ethereum is already so big that these issues don't seem as important. A new chain with this much drama probably would not survive long. Ethereum needs to hand governance to the users and become more decentralized.

Why I Stay Allocated Despite the Uncertainty

I still believe Ethereum has massive potential, but I would not advise a beginner to dive in blind in the short term. Ethereum's rise remains uncertain. Long term, it will probably do well as long as there is no more drama. As for when Ethereum's bull run will truly begin, I have no answer. I am waiting with my ETH, and I stay heavily allocated because the long-term fundamentals still outweigh the weak price action.