A fresh debate has emerged across the crypto sector after David Hoffman, co-founder of Bankless and a long-time Ethereum advocate, confirmed that he sold his ETH holdings. The move did not come with a bearish call on Ethereum itself. Instead, Hoffman framed the decision as a reassessment of how value flows through the network.
“If you missed the news last week, I sold my ETH,” Hoffman wrote on X, adding that the decision followed years of work tied to Ethereum’s ecosystem. “The ETH is Money thesis didn't fail… it played out.” He also stated that Ethereum “got the ETH price it deserves,” and that he does not expect the asset to be rerated in either direction.
Has there been a huge vibe shift in CT over the last 2 weeks, or was that just me selling the last of my ETH
— David Hoffman (@TrustlessState) May 20, 2026
‘ETH is money’ thesis reaches its limits
Hoffman’s central argument challenges one of Ethereum’s most widely promoted narratives. The “ETH is Money” thesis positioned Ether as a superior form of global money that could compete with fiat currencies and even Bitcoin. According to Hoffman, that outcome required near-perfect execution across every layer of Ethereum’s design.
“Money is a coordination game, and coordination is hard,” he wrote.
He described Ethereum as a system that depends on alignment across governance, development, layer-2 networks, and market perception. Each layer had to succeed at a high level to support ETH as a dominant monetary asset.
“ETH is, to some degree, money. But not the maximally successful version that we collectively sought out to achieve,” Hoffman stated.
He added that the opportunity for a major repricing phase appears limited at this stage.
His comments reflect a broader shift in how investors evaluate smart contract platforms. Pricing power has moved closer to measurable factors such as network activity and revenue rather than long-term narratives alone.
Revenue dynamics reshape asset performance
Hoffman pointed to a pattern that has become more visible across multiple blockchain ecosystems. He argued that activity, fees, and token performance show a strong relationship in layer-1 networks.
He referenced periods where Ethereum led the market during peaks in its fee generation, as well as similar trends in other ecosystems. He cited examples such as Solana, BNB, TRX, and NEAR, where stronger revenue aligned with improved token performance.
By contrast, Ethereum shifted toward a rollup-centric structure. This approach reduced costs and improved scalability, but it also redirected a large share of economic activity away from the base layer. Layer-2 networks retained much of the upside, which limited direct value capture for ETH.
This structure has influenced how investors interpret Ethereum’s long-term potential. The network continues to expand, yet the asset tied to it does not absorb the full benefit of that growth.
Stablecoins and infrastructure role dilute ETH demand
Another pressure point comes from the rapid rise of stablecoins within Ethereum’s ecosystem. Hoffman noted that Ethereum hosts more than $160 billion in stablecoins, a figure that has grown sharply over the past few years.
He argued that this expansion strengthens external monetary systems rather than ETH itself. Ethereum acts as infrastructure for dollar-backed assets, which shifts demand away from the native token.
“The utility Ethereum provides is helping increase the monetary network of whatever is money,” he wrote.
This dynamic places ETH in a supporting role rather than at the center of monetary adoption.
ETH remains essential within the network. It serves as gas, collateral, and staking capital. Critics of Hoffman’s position argue that value capture has not disappeared but has instead become more distributed and less visible in short-term price action.
Ethereum’s design prioritizes ecosystem over asset
Hoffman described Ethereum as a system that favors openness over direct monetization.
“Ethereum takes no markup for anything it does. This is the nature of open source software, and this is the power of Ethereum,” he wrote.
He characterized Ethereum as “a giver, not a taker,” which reflects its role as infrastructure for applications, financial tools, and tokenized assets. This design encourages adoption but reduces the likelihood of aggressive value extraction at the protocol level.
The model differs from Bitcoin, which focuses heavily on reinforcing the value of its native asset. Ethereum pursued a broader vision that integrates applications, decentralized finance, and scaling layers.
Hoffman argued that this choice shaped the current outcome. The network achieved strong adoption and technical progress, yet ETH did not evolve into a dominant global monetary asset.
Market reaction reveals divided sentiment
Hoffman’s decision triggered mixed responses across the Ethereum community. Former Ethereum core developer Eric Connor said he understood the reasoning behind the sale, noting that ETH has “grossly underperformed the general crypto market for many years now.”
Connor attributed part of that trend to long-term selling pressure rather than flaws in the protocol itself. He also questioned the idea of concentrating portfolios around a single asset.
Hoffman maintained a positive outlook on Ethereum despite his exit from ETH. “I am massively bullish Ethereum,” he wrote, adding that he expects the network to perform strongly. He also said that only a “marginal amount” of that success will translate into gains for the token.
The contrast between network strength and asset performance remains central to the debate. Ethereum continues to expand its role across finance and technology, while questions about ETH’s long-term valuation persist.
Matvii Diadkov
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