Bankless co-founder David Hoffman said he sold his ETH after concluding that the “ETH is money” thesis largely proved true, marking a noticeable shift from one of Ethereum’s most apparent public supporters. Hoffman said he remains “very bullish” on Ethereum as a network, but no longer sees a clear path for the asset for ETH to receive a structured endorsement.

“For someone who has built a career, community, identity and business around Ethereum, this choice is not easy,” Hoffman wrote. “The ETH is money thesis didn’t disappoint… it worked. Ethereum has gotten the ETH price it deserves, and I don’t think ETH will be re-rated as an asset, higher or lower.”

The argument is not that Ethereum has failed. Hoffman Work is more inconvenient for ETH holders: Ethereum can still be successful as an infrastructure while only a marginal part of that success goes to ETH itself. In his view, the network has become one of the most crucial open source systems in the cryptocurrency industry, but design choices increasingly favor applications, bundles and external monetary assets over its own ETH monetary premium.

Hoffman says Ethereum’s monetary window is closing

Hoffman described Ethereum as a extensive coordination game in which the “ETH is money” thesis required multiple layers of the ecosystem to align simultaneously. Ethereum needed decentralized leadership, elastic governance, quick technical execution, consistent L2 incentives, and enough market dominance to make ETH a natural Schelling monetary point in the ecosystem.

He said it was always a narrow path. “Money is a coordination game, and coordination is difficult,” Hoffman wrote. “The Ethereum project itself presents a set of coordination challenges on many levels, and the ‘ETH is money’ thesis required all of them to succeed, and to succeed.”

According to Hoffman, Ethereum has made a more hard architectural choice compared to Bitcoin. Bitcoin got rid of its base layer to elevate BTC’s monetary role. Ethereum added programmability and tried to maximize the utility of blockchain space. This approach created a huge area for adoption, but also made ETH’s monetary status dependent on Ethereum winning at the same time in terms of technology, culture, governance and market structure.

Hoffman said Ethereum has made it “part way,” but hasn’t reached the maximum thesis version that many ETH bulls once expected.

Fees, L2 and the asset capture problem

A core part of Hoffman’s argument is that astute contract L1 tokens remain tied to activity, fees, and revenue. He pointed to ETH’s dominance in 2021, Solana’s resurgence in 2024, NEAR’s re-rating in 2026 as revenue and burn raise, and long-term fee generators like BNB and TRX as examples of market reward networks that maintain or expand direct revenue capture.

Ethereum, on the other hand, has deliberately moved towards a structure where value leaks out. Scaling execution, applications take a larger share of the margin on the user’s side, and Ethereum provides secure settlements at low costs. Hoffman described it as a feature of Ethereum’s ideology and architecture, but a challenge to ETH as an asset.

“In essence, Ethereum is a giver, not a taker,” he wrote. “Provides L2 with the world’s most secure blockchain space at cost. Tokenizes the entire world’s assets at cost.”

This formulation is at the heart of his decision. Ethereum may be “noble,” “good,” and “the most successful nonprofit organization in the world,” Hoffman argued, but that doesn’t automatically make ETH a better investment from this point forward. He said the rollup-centric roadmap means L2s can take “97% of the margin,” while the theory of chunky applications leaves more economic benefit for the application rather than the underlying asset.

Stablecoins and the problem of “strong cryptocurrencies”.

Hoffman also argued that Ethereum’s usefulness could increasingly amplify other forms of money. He noted that Ethereum had $3 billion worth of stablecoins in 2020 and $163 billion today, a 54-fold raise. In this sense, the network’s success as a settlement infrastructure has helped the development of tokenized dollars, not necessarily in the role of ETH money.

He also questioned whether the “strong version” of cryptocurrencies (DeFi, NFTs, DAOs, and an alternative financial system built for itself) ever became a sufficiently stable cultural or economic equilibrium. The moment when ETH performed most convincingly as internet money, he argued, coincided with the rise of online activity, risk appetite and public fascination with cryptocurrencies in the Covid-19 era.

“ETH excelled as internet money at the exact moment when everyone was forced to use the internet,” Hoffman wrote. “The world discovered cryptocurrency for the first time and it was cool for that short period of time.”

The consequence of this is that ETH’s monetary premium may have depended on a broader cryptocurrency market boom that has not sustained. Ethereum continued to grow, but the public narrative around cryptocurrencies returned to fraud, scams, and speculation, weakening the social foundation necessary for ETH to become the dominant asset for storing 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 matured.

At the time of publication, the price of ETH was $2,080.

Featured image created with DALL.E, chart from TradingView.com