Why did Bankless co-founder David Hoffman sell Ethereum (ETH)?

David Hoffman said he no longer believes the “ETH is money” thesis offers a strong investment case. He argued that Ethereum increasingly creates value for layer-2 networks and applications rather than directly boosting ETH's value as an asset.

What happened to Ethereum's price after concerns about the ETH investment thesis?

Ethereum was trading near $1,975 at the time of the report, down about 14% over the previous month. The decline came alongside weaker on-chain activity and growing concerns about Ethereum's ability to capture value from its ecosystem.

Why are Ethereum active addresses important for investors?

Active addresses measure how many users are interacting with the network. Ethereum's daily active addresses fell from more than 1.5 million in January to around 544,000, suggesting lower user engagement and weaker demand for block space, fees and network activity.

What does rising ETH supply on exchanges mean?

ETH held on exchanges increased from roughly 7 million tokens in April to about 7.5 million in May. Investors often move tokens to exchanges when preparing to sell, so rising exchange balances can be a bearish signal if the trend continues.

Is Ethereum losing ground to competing blockchains?

According to Hoffman's argument, Ethereum has lost fee market share to competing networks. Blockchains such as Solana, NEAR, BNB and TRON have generated stronger token performance partly because they capture more value from network activity.

How does Ethereum's layer-2 growth affect ETH holders?

Layer-2 networks help Ethereum scale by processing transactions more efficiently. However, Hoffman believes many of the economic benefits are flowing to layer-2 ecosystems and applications rather than directly increasing demand for ETH itself.

Is Ethereum's $163 billion stablecoin ecosystem bullish for ETH?

Not necessarily. Ethereum remains the largest settlement layer for stablecoins, but the article argues that growing stablecoin usage primarily supports dollar-backed assets rather than automatically increasing demand for ETH as an investment.

What are the key price levels Ethereum traders should watch?

The main support level is around $1,920, with a deeper support zone near $1,750. On the upside, a daily close above $2,140 would be an important signal that buyers are regaining control and that the current downtrend may be weakening.

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Bankless founder exit deepens Ethereum doubts

Written by Heidi Cuthbert Published Jun. 2 2026Last Updated Jun. 2 2026

Bankless co-founder David Hoffman has sold his Ethereum holdings, saying the “ETH is money” thesis has fully played out as on-chain data and price action point to weakening demand for the asset.

Ether traded near $1,975, down about 14% over the past month, while active addresses have fallen and exchange balances have started rising again, reinforcing concerns about the cryptocurrency’s near-term outlook.

Hoffman said the investment case for ETH depended on every layer of the Ethereum ecosystem outperforming competitors, but argued the network increasingly creates value for layer-2 platforms and applications rather than for ETH itself.

The decline in daily active Ethereum addresses has added weight to that argument, with the metric falling from more than 1.5 million in January to roughly 544,000, according to Santiment data, reflecting weaker activity on the base layer as users migrate elsewhere.

Ethereum has also surrendered fee market share to rival blockchains including Solana, while Hoffman pointed to strong performances from networks such as NEAR, BNB and TRON as examples of chains benefiting from stronger fee generation and value capture.

A second bearish signal emerged as ETH held on exchanges climbed from around 7 million tokens in April to roughly 7.5 million in May, suggesting some investors are positioning to sell after months of accumulation, while Ethereum’s $163 billion stablecoin ecosystem continues to strengthen demand for dollar-backed assets more than for ETH itself.

From a technical perspective, ETH remains trapped in a descending channel with support near $1,920 and a deeper floor around $1,750, while a daily close back above $2,140 would be needed to challenge the current bearish trend and shift momentum back in favour of buyers.

At the time of reporting, Ethereum price was $1,995.95.