Bankless co-founder David Hoffman said he sold his ETH after concluding that the “ETH is money” thesis had widely applied, marking a notable shift from one of Ethereum’s most visible public defenders. Hoffman said he remains “massively bullish” on Ethereum as a network, but no longer sees a clear path for ETH, the asset, to receive a structural revaluation from here.
“For someone who has built a career, a community, an identity, and a business around Ethereum, this choice is not a light one,” Hoffman wrote. “The ETH is Money thesis didn’t fail… it worked. Ethereum got the ETH price it deserves, and I don’t see ETH being revalued as an asset, up or down.”
The argument is not that Ethereum has failed. Hoffman’s thesis is more uncomfortable for ETH holders: Ethereum can continue to succeed as an infrastructure while only a marginal part of that success goes to ETH itself. The network has become one of the most important open source systems in crypto, he says, but its design choices increasingly favor applications, stacks, and external monetary assets over ETH’s own monetary premium.
Hoffman says Ethereum money window is closing
Hoffman described Ethereum as a vast coordination game, in which the “ETH is money” thesis required multiple layers of the ecosystem to align simultaneously. Ethereum needed decentralized leadership, responsive governance, rapid technical execution, consistent L2 incentives, and enough market dominance to make ETH the natural monetary Schelling point of the ecosystem.
Related reading
According to him, it has always been a narrow path. “Money is a game of coordination, and coordination is difficult,” Hoffman wrote. “The Ethereum project itself is a multi-layered set of coordination challenges, and the ‘ETH is money’ thesis required all to succeed and succeed with confidence.”
According to Hoffman, Ethereum made the most difficult architectural choice compared to Bitcoin. Bitcoin removed its base layer to elevate the monetary role of BTC. Ethereum added programmability and sought to maximize the utility of block space. This approach created a huge amount of adoption space, but also made ETH’s monetary status dependent on Ethereum winning in technology, culture, governance, and market structure at the same time.
Hoffman said Ethereum has reached “part of the way,” but not the peak version of the thesis that many ETH bulls once expected.
Fees, L2 and the asset capture problem
A central part of Hoffman’s argument is that L1 tokens in smart contracts remain tied to activity, fees, and revenue. He highlighted the dominance of ETH in 2021, the resurgence of Solana in 2024, the revaluation of NEAR in 2026 alongside revenue and consumption growth, and long-lived fee generators such as BNB and TRX as examples of market-rewarding chains that retain or expand direct revenue capture.
Ethereum, on the other hand, has deliberately moved towards a structure in which value escapes. Rollup execution is expanding, apps are capturing more of the user margin, and Ethereum is offering secure, low-cost settlement. Hoffman described this as a hallmark of Ethereum’s ideology and architecture, but a challenge to ETH as an asset.
“At its core, Ethereum is a giver, not a taker,” he wrote. “It provides L2s with the most secure block space in the world, at cost. It tokenizes assets around the world, at cost.”
Related reading
This framework is at the heart of his decision. Ethereum may be “noble,” “good,” and “the most successful nonprofit in the world,” Hoffman argued, but that doesn’t automatically make ETH a better investment from here on out. He said the stack-centric roadmap means L2s can take “97% margins,” while the big apps thesis leaves more of the economics to the apps rather than the core asset.
Stable coins and the problem of “strong cryptocurrencies”
Hoffman also argued that Ethereum’s utility could increasingly empower other forms of money. He noted that Ethereum hosted $3 billion worth of stablecoins in 2020 and $163 billion today, a 54x increase. The network’s success as a settlement infrastructure, in this sense, helped develop tokenized dollars, not necessarily ETH’s role as a currency.
He also questioned whether the “strong version” of crypto (DeFi, NFT, DAO, and an alternative financial system built for itself) would ever become a sufficiently stable cultural or economic equilibrium. The time when ETH worked more convincingly as an internet currency, he argued, coincided with the increase in online activity, risk appetite, and public fascination with crypto in the COVID era.
“ETH excelled as internet money at the exact moment when everyone was forced onto the internet,” Hoffman wrote. “The world discovered cryptocurrency for the first time, and for that brief period of time, it was cool.”
The implication is that ETH’s monetary premium could depend on a broader crypto-native boom that has not held. Ethereum continued to grow, but public discourse around crypto shifted back toward scams, scams, and speculation, weakening the social foundations necessary for ETH to become a dominant store of value.
Hoffman concluded by emphasizing that he is not bearish on Ethereum itself. His decision, he said, reflects a call for capital allocation after the “ETH is money” thesis reached a mature outcome.
At press time, ETH was trading at $2,080.
Featured image created with DALL.E, chart from TradingView.com
