Bankless co-founder David Hoffman sold his entire Ethereum position, arguing the network's architecture prioritizes applications and stablecoins over ETH holders.
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David Hoffman sells all ETH as stablecoins on Ethereum surge 54x
David Hoffman, co-founder of Bankless, sold his entire Ethereum position last week and rotated into Zcash and NEAR Protocol, saying ETH has no clear path to being re-rated higher.
"The ETH is Money thesis didn't fail. It played out," Hoffman wrote in an essay cross-published on Bankless and X. "Ethereum got the ETH price it deserves, and I don't see ETH being rerated as an asset, higher or lower."
Hoffman's core argument is structural. Ethereum hosts $163 billion in stablecoins, up from $3 billion in 2020 — a 54-fold increase — with the overwhelming majority denominated in dollars, not ETH. Layer-2 networks capture 97% margins from the rollup model, he said, while ETH holders absorb the cost of securing the network. "Ethereum is a Giver, not a Taker," he wrote. "It supplies L2s with the world's most secure blockspace, at cost."
The capitulation by one of Ethereum's most prominent advocates has crystallized a debate the community has circled for years: whether a network can win as infrastructure while its native token fails to capture value. ETH traded at $1,964.63 as of Monday, down 1.97% in 24 hours, with the full moving average stack bearish overhead — the 20-day SMA at $2,135 sits below the 50-day SMA at $2,247, which sits below the 200-day SMA at $2,504.
The Rebuttal
Joseph Chalom, chief executive of SharpLink — the largest Ethereum treasury company and a former BlackRock digital assets executive — pushed back on Hoffman's framing. "There is no Ethereum without ETH," Chalom wrote on X. "The asset and the network are inseparable." SharpLink has staked billions in ETH and recently launched a $125 million DeFi yield fund alongside Galaxy Digital. "In nearly every market cycle, the moments when retail capitulates and sentiment is lowest are when disciplined capital steps into the opportunity," he said.
Ethereum co-founder Vitalik Buterin said nearly 90% of his net worth remains in ETH. Former Ethereum Foundation researcher Dankrad Feist argued the structural problem lies elsewhere: the EF controls less than 0.1% of all ETH, receives no staking or fee revenue, and has no direct economic stake in Ethereum's market performance.
A Bottom Signal or a Structural Shift?
Tom Dunleavy, head of venture capital at Varys Capital, called Hoffman's change of tone a "classic bottom signal" — the kind of capitulation that tends to appear when one of an asset's loudest believers finally exits. "If Ethereum fails, crypto fails full stop," Dunleavy said on the Wolf Of All Streets podcast, pointing to Ethereum's dominance in DeFi activity, stablecoin issuance, and total value locked.
Still, he warned that Ethereum faces a "ship or die" phase as competition from newer networks intensifies. Hedge funds and institutional buyers have crowded into just a handful of stories, most notably Hyperliquid and Zcash, while Ethereum's price struggles to hold above $2,000. The network enters June already down 11.2% in May, with historical data showing ETH has closed June in the red in seven of the last 10 years, averaging a 6.27% decline.
The key support sits at $1,920 to $1,940, with a daily close below that level opening a move toward February lows, according to technical data.
This article is for informational purposes only and does not constitute investment advice.
[1] ETH Continues To Underperform XRP, Zcash: Now Even Its Superfans Are Losing Hope[2] Tom Lee’s Bitmine Reportedly Adds More Ethereum As Critics Point To HYPE’s Recor...[3] Ethereum Is Winning, But Its Token Holders Are Losing Faith. - Forbes[4] Ethereum’s ‘Ultrasound Money’ Narrative Is Dead, Analyst Says, While Calling David Hoffman’s ETH Exit Bullish - Stocktwits
