Ethereum (ETH) is a hot topic in the cryptoverse. The crypto asset, predicted to be next in line for spot exchange-traded fund approval by the SEC, early this week soared past the $3,000 mark for the first time since April 2022.

Some market watchers predict ETH could easily set a new record high this year amid an imminent major network upgrade, Dencun.

But investor Fred Krueger isn’t impressed. He recently expressed concerns about Ethereum’s fundamental trends and potential regulatory barriers. As such, he is advising investors to steer clear of the second-largest cryptocurrency.

Ether’s Plummeting Utility

Fred Krueger observed in an X post that Ethereum has been experiencing declining network usage despite recently topping $3K for the first time in two years. According to Krueger, the number of Ethereum’s daily active users (DAUs) has dropped from 120,000 in 2021 to merely 66,000 over the past year.

The popular commentator also pointed to the fall in user activity on Ethereum’s top decentralized exchange protocol, Uniswap, citing it as a cause for concern. “The top app, Uniswap V3 is only getting 16K DAUs. I remember, back in 2020, this number was 60K or more,” Krueger posited.

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That, however, has not stopped investors from pushing ETH to a $361 billion market capitalization, he claimed. He further asserted that ether has become a meme coin, similar to the likes of canine-themed crypto Shiba Inu (SHIB).

“It’s not particularly cheap ($1.50 per transaction), or fast. If you are just interested in reward points for games or casino-style DeFi apps — Solana, Avalanche, Near, etc.. all crush it,” Krueger continued.

Spot ETH ETF: A Pipe Dream?

Krueger’s criticism goes beyond Ethereum’s utility to the asset’s legal outlook in the U.S. In his opinion, there is no chance Securities and Exchange Commission chair Gary Gensler will approve spot ether ETFs in the future.

“I don’t think Gensler is going to allow an ETH ETF. If you believe in the Tooth Fairy, have fun. I just don’t think Gary wants to make his second ETF a massive pre-mine. Sets a very bad precedent.”

“Avoid ETH at all costs,” Krueger summarized.

As ZyCrypto reported previously, brokerage firm Bernstein says there is about a 50% chance ETH spot ETFs secure SEC approval by May and a near-certain likelihood of approval within the next 12 months. Several institutional players have filed applications for these ETH products, including BlackRock, Fidelity, and Franklin Templeton. The earliest deadline for greenlights is in May for VanEck’s ETF.