Tulip King
Head of Strategy at CounterpartyTV, Crypto Investor
Ether's distribution is its biggest weakness, because proof-of-stake enshrines the Cantillon effect and poorly distributed moneys always fail. Proof-of-work spreads supply through forced selling by miners, who have real costs. Ethereum's long proof-of-work history does make its distribution unusual among chains that started as proof-of-stake, and @lex_node raises fair points, but distribution would be a major reason if Ethereum fails. x.com x.comÂ
Ethereum can succeed as a world computer and still make zero dollars for ETH. Tim Berners-Lee earned nothing from inventing the web, and open protocols such as Linux don't make money, so facilitating trillions in value does not mean the token captures it. This rebuts @marcusm4ximus, who values ether on its world-computer vision rather than network activity and says PoS is less centralized than PoW; instead, PoS creates large pools just like PoW, and Ethereum's Nakamoto coefficient is 2. x.comÂ
Ethereum's strong ecosystem is not translating into enough ETH value capture to support significant appreciation unless that changes. The Ethereum Foundation selling ETH again is frustrating; buybacks and stronger incentives for L2s to accumulate and buy back ETH could improve the token's economics. Fundstrat, which owns roughly 5% of the supply, has a huge opportunity to push for better value capture. x.com x.comÂ
Ethereum's main problem is that it removed proof of work, and the second is that a central "they" exists that could make such a drastic change. x.comÂ
ETH is undervalued because collateral and staking create demand L1 fees miss. Aave V3 has 2.2M WETH supplied and 1.75M borrowed on Ethereum. Yet Base reportedly paid Ethereum ~$15K for September data publishing versus $711K to the Optimism Collective, showing weak L1 capture. Absolute stablecoin growth matters more than share, but is not itself ETH demand. The case strengthens when activity creates sustained demand to hold, borrow against or stake ETH, or raises fee burn relative to issuance. … Show more
Layer-2 networks are Ethereum's competitors disguised as allies, slowly draining it in a vampire attack. They take the users, keep the fees and lobby the base layer to stay small, returning almost nothing; the small fraction of fees sent back to ETH only confuses the narrative. L2s will either migrate or become their own L1s, and either way ETH is left holding the bag. x.com x.comÂ
ETH should stay stuck for a long time because of the many trapped buyers created by BitMine and Tom Lee. Nearly every use case for it has been tried since 2019, and tokenization is more exciting than ETH itself. x.comÂ
Ethereum's upside looks worth the bet because the payoff to its prior high is much larger than the downside, and buyers still respond to good news. There is roughly 16% down to $1,950 versus a little over 2x back to the prior all-time high. LIT caught a sharp bid around its US regulatory plans, and CHIP rallied 40% around a $1 million buyback; that response looks like a bull-market sign. x.comÂ
Zcash's shrinking PoW security budget makes a full move to PoS essential to its survival. Fees cover only 0.01% of its mining subsidy; miners have incentives to resist, while centralized governance lacks a workable stakeholder vote. Crosslink improves on PoW but keeps both systems' drawbacks; it could serve as a political bridge to full PoS and stakeholder governance. A "ZEC Classic" split is now probable depending on how factions act, and a vote may be too late to prevent it. x.com x.com x.comÂ
Ether faces a fundamental ceiling on valuation because it is not seen as money, and anything not seen as money has that cap. The ETH-as-money idea was right but badly executed; calling ETH a spam-prevention token on a distributed database was the real sin. x.com x.comÂ
Ethereum's unstaking concern is losing steam because the validator exit queue has nearly cleared. Over 1.3 million ETH is still waiting to stake. x.comÂ
Ethereum feels weak with no clear catalyst, despite an appealing story of institutional adoption for real utility and infrastructure. The crypto craze may have petered out after about 15 years, and bitter memories of losses from counterparty blowups such as Voyager and FTX may never fade. x.comÂ
