“Ethereum can be seen as a form of currency to some extent, but it has not yet reached the ideal state we all aspire to.”
The argument that “Ethereum is a currency” posits that as a decentralized blockchain, Ethereum possesses monetary attributes and has built-in mechanisms to resist inflation, giving it the potential to serve as a superior store of value compared to fiat currencies. Supporters hope that the value of ETH will significantly increase as the network expands through Layer 2 solutions and tokenized applications. However, in reality, the price history of this asset is much murkier than the stringent predictions implied by this argument.
Historical peak price data shows that Ethereum approached $5,000 in August of the last cycle, while its recent trading price hovers around $2,000. This trend—first climbing to new highs, then undergoing a prolonged multi-year consolidation—has sparked debates among investors and developers regarding ETH's role as a store of value, a currency for on-chain activities, or a utility token closely tied to network demand and use cases.
In a public statement, Hoffman described Ethereum as “a giver, not a taker,” emphasizing that the network provides secure block space and supports tokenization at cost, with most fees flowing to Layer 2 networks built on top of Ethereum. “Ethereum does not mark up what it does. This is the essence of open-source software and the strength of Ethereum. Ethereum provides its full suite of important value to the world at cost…” Hoffman stated.
Despite gradually reducing his large ETH position, Hoffman remains “extremely bullish” on Ethereum's long-term prospects, predicting that the network will “perform exceptionally well from here on out.” He believes that this success will only be reflected in a small part of the token price, emphasizing the broad disconnect between network fundamentals and market pricing in the current cycle.
Responses from Ethereum enthusiasts and observers have varied. Ryan Sean Adams, co-founder of Bankless, referred to Hoffman’s decision as “the end of an era,” highlighting the emotional and strategic shift brought about by the community’s long-standing view of ETH as a core political and financial asset. Former Ethereum core developer Eric Connor offered a pragmatic perspective, suggesting that Hoffman’s sale is not a wholesale rejection of ETH, but rather a reflection of its performance relative to the broader crypto market in recent years.
Connor pointed out that ETH's lag is not due to the fundamentals of the protocol, but rather the result of larger macro dynamics and distribution effects: in the early days of the Ethereum bull market, the rapid creation of new wealth exerted tremendous pressure on prices. “Maximizing a single currency in portfolio management is quite foolish,” he added, hinting at a broader discussion about diversification in crypto investment portfolios.
Main Points
- Contextualizing this move within the narrative of ETH's price
- The price history of Ethereum has become a framework for many debates