Ethereum, Even Its Leading Supporter Has Given Up... "Why Can't ETH Rise Even With Stablecoins?"

▲ Ethereum (ETH)/AI-generated image

David Hoffman, considered a leading supporter of Ethereum (ETH), disclosed his reasons for selling his ETH holdings, bringing the gap between the success of the Ethereum network and the value capture of the ETH token to the forefront of market discussion.

According to U.Today on May 27 (local time), Hoffman, co-founder of Bankless and an Ethereum commentator, explained that the long-standing investment thesis “ETH is money” has not completely failed but has effectively ended, regarding his reasons for selling his ETH holdings.

Hoffman's core argument is that the Ethereum network and ETH asset should be viewed separately. He stated that he has taken a structurally neutral stance on ETH as an asset but remains optimistic about the Ethereum network itself. U.Today reported that Hoffman believes Ethereum has succeeded as an open infrastructure but judged that the ETH token has not sufficiently captured the value of the network's growth directly.

Hoffman believes Ethereum chose a difficult path, prioritizing utility, decentralization, and ecosystem expansion rather than aggressively growing ETH's monetary premium. Unlike Bitcoin (BTC), which focused on strengthening Bitcoin as its core product, Ethereum is optimized for applications, rollups, stablecoins, and widespread network adoption. This strategy has significantly expanded the ecosystem, but it has led to the dispersal of value capture across various areas.

He also pointed to the Layer 1 revenue structure as an issue. In smart contract chains, fees, network activity, and burning mechanisms are becoming increasingly important factors, and he mentioned cases like Solana (SOL), BNB, TRON (TRX), and NEAR, where strong revenue growth and token performance are intertwined. In contrast, as Ethereum moved to a rollup-centric model, a significant portion of the economic upside remained within Layer 2 networks. U.Today noted that despite achievements in reducing transaction costs and improving scalability, fee pressure on the base layer and the speed of ETH burning have not increased as rapidly as in past bull markets.

Hoffman also saw the proliferation of stablecoins as a factor weakening ETH's status as native internet money. Currently, over $160 billion in stablecoins are secured on Ethereum, but most of this activity, he explained, strengthens dollar dominance rather than directly boosting ETH demand. U.Today also introduced a counterargument that ETH is still used as collateral, staking capital, gas, and payment infrastructure. However, Hoffman's point is clear: Ethereum prioritized ecosystem success, expecting ETH's financial status to follow naturally, but so far, the network has been more successful than the asset.

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