Did ETH Fail to Become "Money"? The Logic Behind Bankless Icon Hoffman Letting Go of 9 Years of Holdings

■ "The thesis didn't fail — it played out"

Hoffman disclosed selling all his ETH on May 21 and published a detailed essay on May 26. As someone who built his career, community, and business on Ethereum, he said the decision did not come lightly — yet argued the "ETH is Money" thesis did not collapse but rather "played out." Ethereum has earned its market cap and the ETH price it has, and he sees no path for the asset to be rerated meaningfully higher or lower from here. His point is not that Ethereum failed; it is more uncomfortable — the network can keep succeeding as infrastructure while only a marginal portion of that success flows back to ETH itself.

■ The paradox of a "giver" architecture

At the core is his framing of Ethereum as "a giver, not a taker." It supplies L2s with the world's most secure blockspace at cost, tokenizes the world's assets at cost, and secures DeFi at cost. Taking no markup is the nature of open-source software and a source of strength — but by design, value "leaks outward" to rollups, applications, stablecoins, and tokenized dollars. He calls Ethereum the world's most successful nonprofit, while noting that this does not automatically make ETH a superior investment from here. As blockspace commoditizes and fees trend toward zero, "ETH becoming money" would require Ethereum to sustain overwhelming market dominance — to "win a game it was never designed to play." He weighs heavily that ETH's real demand increasingly benefits other forms of money, such as stablecoins (over $163 billion hosted on the network), rather than ETH.

■ Reactions and the market

Co-founder Ryan Sean Adams called it the "end of an era." Former core developer Eric Connor said he doesn't blame Hoffman, noting ETH has grossly underperformed the broader crypto market for years, attributing the lag to macro and distribution factors — selling pressure from the large cohort of early millionaires — rather than protocol flaws, and adding that single-coin maximalism is unwise. Meanwhile, many analysts still see upside from network upgrades, growing L2 activity, and spot-ETF inflows. The immediate market reaction was muted, with ETH around $2,050–$2,100, unable to clear $2,300 resistance. His post topped one million views, splitting readers among those praising his transparency, those fearing damage to sentiment, and those reading it as a bottom signal.

##[Business Development Insights]

1. "Network success" and "token value capture" are separate problems. Hoffman's argument cuts to the heart of infrastructure revenue design: a layer that provides value at cost struggles to capture revenue. As blockspace commoditizes and fees trend toward zero, infrastructure providers must start their design from the question of where to place a billable, differentiated layer atop the commoditizing base.
2. The structure of value "leaking" to L2s, apps, and stablecoins reinforces the case for a multi-provider/aggregation strategy. Rather than betting on a single L1's native token, connecting across the layers where value concentrates (L2s, stablecoin settlement, tokenized assets) is more resilient long-term. A design that avoids concentration in any one chain or token and can follow the points of value capture strengthens an infrastructure business's durability.
3. The counter to commoditization is not "markup" but "reliability and regulatory fit." The fact that a pure open-source, free-provision model struggles to monetize shows, conversely, that value "not provided at cost" — regulatory compliance, data residency, SLA guarantees — is precisely the billable layer for regulated financial institutions. A Japan compliance-orchestration layer is designed to monetize exactly this "value not provided at cost."

[Sources]

• TradingView/Cointelegraph, "Ethereum bull David Hoffman explains why he sold his ETH" (May 2026) https://www.tradingview.com/news/cointelegraph:5c2990ca4094b:0-ethereum-bull-david-hoffman-explains-why-he-sold-his-eth/
• CryptoRank, "Bankless Co-Founder Explains Why He Sold All His Ethereum" https://cryptorank.io/news/feed/04887-bankless-co-founder-why-sold-all-ethereum-eth
• BeInCrypto, "Why Bankless Co-Founder Sold His Entire Ethereum Portfolio" https://beincrypto.com/why-bankless-cofounder-sold-ethereum-portfolio/
• CryptoPotato, "'Ethereum Is a Giver, Not a Taker': David Hoffman Explains ETH Exit" https://cryptopotato.com/ethereum-is-a-giver-not-a-taker-david-hoffman-explains-eth-exit/
• MEXC News, "David Hoffman, ETH Bull, Explains Why He Sold ETH" https://www.mexc.com/news/1114897
• Cryip, "Bankless Co-Founder David Hoffman Explains Why He Sold His ETH" (May 26, 2026) https://cryip.co/bankless-co-founder-david-hoffman-explains-why-he-sold-his-eth/
• TechFlow (summary/translation of Hoffman's essay) https://www.techflowpost.com/en-US/article/31774