Bankless co-founder David Hoffman revealed why he sold most of his ETH, saying the “ETH is Money” thesis failed to fully materialise despite Ethereum’s strong ecosystem growth.
Ethereum is once again at the center of debate after David Hoffman, co-founder of the crypto media platform Bankless, explained why he decided to sell most of his ETH holdings despite still remaining positive on Ethereum’s long-term ecosystem.
Now, as Ethereum struggles to regain momentum against rising competitors like Solana, Hoffman says the original investment thesis around ETH may no longer be playing out as expected.
Hoffman explained that he is not bearish on Ethereum. Instead, he believes the original “ETH is Money” investment thesis has largely already played out.
He stated that, “The reason I sold my ETH is not because I am bearish ETH, but rather that I think the ‘ETH is Money’ thesis has played out.”
Hoffman added that he now sees better opportunities elsewhere in the market and decided to reallocate capital accordingly.
His comments arrive during a difficult period for Ethereum’s market performance.
According to Hoffman, the “ETH is Money” thesis required almost everything to go perfectly for Ethereum. He explained that Ethereum’s strong momentum during 2021 and 2022 made it appear that ETH becoming a dominant monetary asset was almost inevitable.
However, looking back, Hoffman now believes early warning signs started appearing much sooner.
He pointed specifically to Solana’s rapid rise during 2021 and the growing anti-Ethereum sentiment that started spreading across crypto markets at the time.
According to Hoffman, that period showed the coordination challenges surrounding Ethereum were becoming much more difficult than originally expected.
Hoffman explained that one of Ethereum’s biggest challenges involved balancing decentralization while still remaining competitive in a fast-moving crypto market.
He argued that the Ethereum Foundation needed to remain decentralized enough to allow alternative power structures to emerge.
At the same time, he believes the ecosystem also needed to move with the urgency and execution speed of a startup fighting for survival. That balance proved extremely difficult.
Hoffman also pointed toward Ethereum’s Layer-2 ecosystem as another major coordination challenge.
According to him, L2 teams needed freedom to operate independently while still remaining closely connected to the broader Ethereum and ETH ecosystem. However, technical integration across Ethereum and its Layer-2 networks often moved too slowly.
He suggested faster coordination and execution may have helped strengthen Ethereum’s competitive position.
Despite selling his ETH, Hoffman made it clear that he still strongly believes in Ethereum as a blockchain ecosystem.
In fact, he described Ethereum as “architecturally designed to maximize success” for applications, Layer-2s, and developers building on the network. He praised Ethereum’s “fat-app thesis,” where applications capture most of the fees generated across the ecosystem.
He also highlighted Ethereum’s rollup-centric roadmap, which allows Layer-2 projects to operate with extremely high profit margins.
However, Hoffman believes this success has not necessarily translated into the same level of value capture for ETH itself.
That distinction became one of the biggest reasons behind his decision to sell.
Ethereum has struggled for months against both Bitcoin and several competing Layer-1 ecosystems.
The network recently faced declining ETF demand, weaker market sentiment, leadership criticism and slower ecosystem growth compared to some rivals
At the same time, Solana, AI-focused chains, and high-speed trading ecosystems have gained increasing attention from both retail and institutional traders.
Several analysts believe Ethereum’s current challenge is no longer about technical capability, but rather about narrative strength and capital efficiency.
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