Author: Prathik Desai

Translation and Compilation: BitpushNews

Introduction

In the past two weeks, the crypto community has focused almost entirely on two things: the drop in Bitcoin prices and the macroeconomic environment driving that decline—CPI data, government stimulus measures, the AI bubble, liquidity, treasury yields, ETF outflows, the U.S. Supreme Court's ruling on U.S. tariffs, and other assorted matters.

However, I want to talk about Ethereum's charts and its journey over the past few years.

The volatility of Ethereum's price is enough to make an outsider believe how mundane life can be for someone holding a large Ethereum portfolio.

Many crypto Twitter (CT) users share a similar view of this Layer-1 blockchain, which has garnered too many nicknames: the world computer, the future of internet infrastructure, the financial layer of the internet, and so on.

In today's article, I will reflect on how Ethereum's marketing issues have led to a mispricing and misunderstanding of its potential in the market.

To do this, I will draw on an interview program featuring Equilibrium Labs investment partners Mika Honkasalo and Saurabh Deshpande.

Here are the parts that impressed me.

Ethereum's "Identity Crisis": Misunderstood Value

In this cycle, discussions about ETH are often dominated by emotions. Whenever Bitcoin hits a new all-time high, the crypto community is filled with sarcastic remarks about Ethereum's poor performance, as if this second-largest network is obligated to follow Bitcoin's lead.

There is nothing in Ethereum's design that promises a "currency premium."

But I understand why the market has incorrect expectations for Ethereum.

Bitcoin has one task and one expectation: to become digital gold, a store of value that appreciates in dollar value due to its inherently limited supply.

Ethereum's value, on the other hand, is pulled in multiple directions, balancing its core principles such as transparency, security, immutability, and programmability through smart contracts.

In this context, the Ethereum Foundation's efforts (or lack thereof) to communicate its true aspirations have led people to misunderstand Ethereum as a currency, just as they view Bitcoin.

There are two perspectives here, which some call an identity crisis stemming from marketing missteps.

Brand Differentiation: A Comparison of Ethereum and Solana

Mika compared this to Solana's branding efforts.

Despite various jokes and memes about Solana, the chain has marketed a single message over the past two years: it is building a "decentralized Nasdaq that operates at near-light speed."

You may disagree, but it has maintained a consistent message without pretending to be ten different things or a currency equivalent.

Meanwhile, Ethereum's narrative has always lacked coherence—sometimes it claims to be the internet infrastructure of Web3, sometimes it boasts as a "super sound currency," and at other times it is packaged as "digital oil."

While these labels are all justifiable, they fail to form a prominent core objective or unified grand vision.

Although these concepts themselves are unassailable, they may create disadvantages on a business level. This leads the market to simply categorize ETH as a currency narrative, while in reality, the blockchain has long evolved into the infrastructure supporting decentralized finance protocols in Web3.

I appreciate Mika's perspective of viewing crypto projects as cash flow-generating entities rather than mere currencies, but there is a paradox: currently, Ethereum plays more of a settlement layer role, with a significant amount of transactions, fees, and user activity actually occurring on cheaper and more efficient Layer 2 networks.

Thus, when the market attempts to anchor ETH's value through a fee-burning mechanism, the efficiency gains become an awkward statistic— the more on-chain activity migrates to L2, the weaker the deflationary effect on the mainnet.

Ethereum's Unique Advantage: Performance of Digital Asset Treasuries (DATs)

There is another perspective. Some may argue that Ethereum or its community members do not need to market their intentions or purposes.

Ethereum's uniqueness is particularly evident in certain areas.

Look at how Digital Asset Treasuries (DATs) behave. DATs with a heavier weighting in Ethereum outperform those with a heavier weighting in Bitcoin because staked ETH generates yield, while Bitcoin does not.

This characteristic changes how these companies survive through market cycles.

Bitcoin treasuries are like roller coasters, fluctuating with market cycles. When the underlying asset rises, their balance sheets look like gold mines, but once liquidity dries up (as it has now), the cracks hidden beneath the surface become apparent.

In the worst-case scenario, when DATs rely solely on their Bitcoin treasuries with little other operational income, they often pay their monthly bills by issuing new equity, as I explained here. They lack a revenue component, no internal engine, and no way to make their assets work harder than the charts.

Ethereum DATs are not just holding ETH. They can stake, re-stake, and earn native yield. Treasuries denominated in ETH can participate in the economy they are in. Staked ETH can shield investors from market cycles.

This part of the story rarely enters Ethereum's marketing, partly because the community refuses to market itself.

But if you peel back all these layers and observe ETH's actual performance from the perspective of treasury capital, you will see its true asset attributes. Its value is realized through actual use, on-chain activity, and ecological composability, leading to continuous compounding growth.

Mika ties Ethereum's fate to its ability to "build products that a billion users truly need." He also mentioned that with Coinbase's channel distribution advantage, Base has become the most successful L2. I believe Ethereum's future trajectory also depends on this core element.

Even if Ethereum itself is not good at marketing, it doesn't matter—as long as it can continue to be the underlying soil for DeFi projects, allowing these projects to reach mainstream markets. As long as various applications, consumer-grade products, and L2s continue to choose Ethereum as their settlement foundation, the network can achieve victory through sustained demand for block space, generating a continuous stream of fee revenue.

Its development path can be traced back to AWS's footsteps: from a slow-growing, low-margin experimental project within Amazon to ultimately transforming into the company's most important business pillar.

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