The Ethereum Value Proposition: Dark Horse Edition

If you’ve been in this sub for years, you may remember a series of posts here dubbed “ethereum value proposition” back in 2021 by yours truly during an epic eth fud campaign before ETH went on its face ripping rally.

Check the receipts, I did a multi week series in mid march 2021 and days later eth made the face melting gains 3x and up.

Why am I telling you this? To toot my own horn? No.

It’s because the reason I made those posts years ago was because the market was being HIGHLY irrational toward ETH and I believe it is doing it again, and where irrationality exists, opportunity for gains exists as well.

If you’ve had a pulse in crypto the last 3-6 months you’ll know everyone and their mom has turned bearish on ETH. In 2021 the criticism was “EtH cAnT ScALe”, now it’s “EtH is DeD”

Nonsense. And here’s why:

Tradfi has quickly realized that the megalithic opportunity in crypto is stablecoins (see pic).

As you can see stablecoin volume has skyrocketed in the last 4 years eclipsing PayPal, bitcoin, remittances, and ALMOST approaching the levels of VISA, the largest payment processor in the world.

Guess where the VAST majority of stablecoin volume happens? Yep Ethereum and it’s L2s. Over 70%.

“Oh but ETH L1 has no usage no one uses it or oh it’s L2s are dead bla bla bla.”

No, ETH has significantly scaled by introducing “blobs” a few months back. check L2beat, Ethereum and its L2s users and transactions are near all time highs for an aggregate of ~370 TPS currently. Source: https://l2beat.com/scaling/activity

“Oh ok so some people use ETH big deal, but it’s still not a good investment”

If that were true,why then while everyone and their mom has been fudding ETH, Blackrock, (the largest hedge fund in the world)in the last 2 months has increased it’s holdings of ETH in its ETFs by a whopping 65%? Source: https://x.com/EthereanVibin/status/1858254969389863290

Why is over 95% of Blackrocks “BUIDL” fund of over 500 million dollars built on Ethereum?

Why are states like Florida and Michigan starting to acquire ETH? Florida now holds over 800 million in crypto related investments and Michigan 11 million: https://www.ccn.com/news/crypto/michigan-largest-ethereum-etf-holders-us/

“Oh but Bitcoin is the only scarce asset with real value for holders, everything else is just a scam or gambling”

Since proof of stake and the burn was implemented about 3 years ago ETH has had HALF the inflation rate of bitcoin: https://ultrasound.money/

In laymen’s terms, bitcoin is being printed at twice the rate of ETH. People literally do not realize this. This is beyond significant.

Michael Saylor himself, the bitcoin messiah has said that bitcoin HAS to figure out a way to generate yield, because just holding it long term is not economically feasible, direct quote:

“The point is If the capital doesnt generate a return its a non performing asset, you need to address the issue. If I put $100B into $BTC and the yield is 0%, thats just as bad as having $100B bonds that pay 0% yield. In both cases theyre non performing"

Source: https://x.com/etheraider/status/1836493170772971646

What this means is that Saylor fully recognizes that yield is KING.

Everyone knows that stocks that provide quality yield command a premium, you don’t think crypto assets will command the same premium anon?

But don’t confuse yield with inflation, yield comes from “activity/MEV/fees”, because if you have high yield due to inflation and not from actual usage of the chain, then your yield will be high but so will the inflation of your coin so you never come out ahead.

And what chain has the purest native premium on yield? The one with the most activity/mev/fees RELATIVE to its inflation, in other words Ethereum.

Saylor for a long time discredited eth because he said it was a security. Now it officially is not. He now says he wants a “form of bitcoin” aka a scarce asset that gives him yield…..

You do the math.

Saylor may never capitulate and buy ETH due to pride or maybe because he’s built a religious cult following and attack the fragility of bitcoin maximalism by holding another asset but that doesn’t mean you have to repeat his mistake.

Is ETH the BEST asset in crypto? No, there’s no way I can make that claim about any asset without being biased or disingenuous.

Is it ONE of the best risk adjusted reward plays right now given history, tech, present social bias, and network effect?

Absolutely.

I could go on and on about how ETH has always outperformed BTC in bull cycles, how the weekly RSI is at all time historic lows and therefore represents a legendary buying opp, etc etc

But I’ll end with this:

3 years ago the level of FUD surrounding ETH is what prompted me to post this series because it was so over the top irrational.

The same pattern is repeating now.

If you listened then and did the counter trade congrats. If you didn’t, here’s your second chance

Don’t fall for the CT FUD doomloop.

ETH is the dark horse this cycle.

Load up, you won’t regret it.