Why has Ethereum underperformed Bitcoin since the Merge?

An Ethereum developer known as Reid argues that Ether's roughly 65% decline against Bitcoin since the September 2022 Merge is primarily due to execution failures rather than market cycles. He believes missed product opportunities, staking issues and the network's scaling strategy have weakened Ethereum's value capture.

How much has Ethereum fallen against Bitcoin since the Merge?

According to the analysis, the ETH/BTC ratio peaked near 0.085 around the Merge and has since fallen to approximately 0.028. This represents about a 65% decline in Ethereum's value relative to Bitcoin over the period.

What is "execution debt" and why does Reid blame it?

Reid uses the term "execution debt" to describe strategic and product decisions that he believes were delayed, poorly executed or never delivered. He argues these accumulated shortcomings have weighed on Ethereum's competitiveness and investor sentiment.

Why does Reid criticise Ethereum's Merge messaging?

Reid argues that Ethereum's emphasis on reducing energy consumption by 99.95% appealed less to investors than practical benefits such as yield generation, transaction costs and network performance. He believes institutions and users were more focused on utility than environmental messaging.

What is the criticism of Ethereum's staking experience?

Reid points to the lack of a first-party staking application nearly three years after the Merge. Users still need 32 ETH to run a validator directly, leading many participants to rely on third-party staking providers.

Why is Lido a central part of the debate?

Lido reportedly controls about 24% of all staked ETH. Critics argue this concentration creates centralisation risks, while supporters view it as a practical solution for users who cannot meet Ethereum's validator requirements.

How do rollups factor into Ethereum's underperformance?

Reid argues that Ethereum's rollup-centric roadmap has shifted economic activity away from the main blockchain. He claims Layer 2 networks capture growing amounts of value and fee revenue that previously accrued directly to Ethereum's base layer.

What role did EIP-4844 play in the discussion?

EIP-4844, implemented in March 2024, significantly reduced data costs for Layer 2 networks through blob transactions. Reid argues that this helped rollups grow but also reduced fee generation for Ethereum's main network.

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Ethereum insider blames foundation for ETH slide

Written by Mahathir BayenaPublished Jun. 1 2026Last Updated Jun. 1 2026

An Ethereum developer has argued that ether’s 65% decline against Bitcoin since the network’s 2022 Merge reflects years of execution failures rather than broader market conditions or coordination challenges.

Reid, an ICO-era participant who continues to build on Ethereum, said the ETH/BTC ratio has fallen from about 0.085 around the Merge in September 2022 to roughly 0.028 by late May, while ether remains below $2,000 and down 21% over the past year.

Reid rejected the idea that ether’s underperformance reflects a natural market limit, arguing instead that specific strategic and product decisions by the Ethereum Foundation contributed to the decline.

According to Reid, the Foundation focused heavily on promoting the Merge’s environmental benefits while institutions were seeking yield opportunities, developers wanted faster finality and users were looking for lower transaction costs.

“The smoking gun, in Reid’s read, is the absence of a first-party staking app three years after the Merge,”

He wrote, noting that users still need at least 32 ETH to run a validator directly and many instead rely on liquid staking providers.

Reid pointed to the growing influence of Lido, which controls about 24% of staked ETH, and argued that the Ethereum Foundation’s reluctance to launch its own staking product has allowed third-party platforms to dominate the market.

He also criticised Ethereum’s rollup-centric roadmap, arguing that upgrades such as EIP-4844 reduced fee revenue on the base layer while value accrued to layer-2 networks including Arbitrum and Base, leaving the future direction of the ETH/BTC ratio dependent on whether the Foundation changes its product strategy.

At the time of reporting, Ethereum price was $1,974.43.