With EIP 1559 activated, Ether’s economic model became similar to that of tech stocks, while Bitcoin (BTC) solidified its “store of value” status. That was a major mistake for Ethereum that damaged ETH, Frax and Everipedia founder says.
Ethereum’s network utility fails to catalyze ETH price
Ethereum (ETH), the largest smart contracts platform, remains “amazing” and is still on its way to becoming a major issuance layer in the world. At the same time, this inspiring tech journey has nothing to do with ETH price performance, Frax’s Sam Kazemian shared on X.
This has been my thesis: Ethereum the network is amazing & going to be the major issuance ledger of the world. But very little, if any, of that value will be captured by the $ETH asset (due to ETH pivoting to a P/E DCF tech stock model). Empirical validation: https://t.co/91N2Sx8Qg6
— sam.frax (@samkazemian) April 10, 2025
As Ether (ETH) keeps disappointing its community, Kazemian sees the wrong narrative as a root cause of its underperformance. With periodical token burn events introduced by EIP 1559 activation on Aug. 5, 2021, ETH pivoted to the wrong utility model:
Biggest mistake was changing the social Overton window of EIP1559 burns as revenue/stock buybacks instead of ‘ETH is digital gold/silver/oil like $BTC & some of the commodity gets used up every block as part of the design.” Instead, it’s now more tech stock instead of BTC-like.
Also, he opined that, if an EIP 1559 analogue was implemented in Bitcoin (BTC), the “digital gold” narrative of BTC maxis would also be damaged.
As such, with its P/E DCF (price-to-earnings discounted cash flow) valuation model, the ETH cryptocurrency fails to benefit from the battle-tested utility of its underlying blockchain.
As covered by U.Today previously, EIP 1559 with its fee burn events was the most radical upgrade of Ether tokenomics ever.
ETH/BTC routinely finds new low; is it over for Ether?
Ethereum’s (ETH) underperformance compared to major cryptocurrencies is in the spotlight for the global crypto community.
In his thread, Nic Puckrin, Coin Bureau founder and CEO, shared some reasons for this painful situation. He noticed that the average ETH owner bears paper losses right now.
Ethereum is having a rough year.
With ETHBTC hitting fresh 5-year lows, the data tells an uncomfortable story.
Will the bleed continue?
Here’s what’s really going on 👇
— Nic (@nicrypto) April 11, 2025
Ethereum (ETH) has lost its narrative battle to Bitcoin (BTC). Other L1s are eating its lunch when it comes to smart contracts deployment. Even Ether-based L2s siphon liquidity and damage ETH’s value.
Institutional money — based on spot ETF performance in the U.S. — clearly chose Bitcoin (BTC) over Ethereum (ETH). Also, it is highly unlikely to benefit from monetary injections globally.
That’s why more blood might be ahead for the ETH/BTC pair.
Today, on April 12 in early morning hours, ETH/BTC hit another bottom at 0.18666. It means that 1 Bitcoin (BTC) is now equal to 53.5 Ethers. This is the lowest rate for ETH/BTC since early 2020, data says.
