In a pair of
Ethereum worth has nothing to do with utility
Szabo’s central argument is resolute. “The elemental drawback with ETH valuation is that Ethereum’s main use instances are largely unrelated to ETH’s market worth.” In his view, Ethereum “may very well be very helpful” and its purposes “might yield nice returns.” Nevertheless, “ETH should still be low, or vice versa. There’s little correlation between the 2.”
He contrasted this with Bitcoin, whose “main use case is a retailer of worth that’s intently tied to cost,” including, “Bitcoin’s primary design is a lot better suited to this use case, so ETH can not emulate that and has to depend on different use instances that aren’t as effectively tied to cost.” For Szabo, the secret is structural. Ethereum’s utility doesn’t reliably translate into ETH’s worth seize, whereas Bitcoin’s objective and worth are intertwined by design.
Szabo’s assertion, which returned to X in late September 2025 after a five-year absence, got here in response to Watkins’ a. Researchers have a look at the market from the alternative angle, arguing that buyers routinely over-engineer layer-1 valuation fashions, whereas pricing and narrative do the heavy lifting. “Time and time once more, I see folks overthinking L1 valuations,” he wrote, tying the final a part of ETH’s power into narrative pivots somewhat than spreadsheet improvements.
Why has the worth of ETH tripled since April?
“The one distinction between $1400 ETH and $5000 ETH was Bitmine.” “Ethereum was a dying platform,” he stated in April. Right now, “it is a stablecoin chain and the subsequent ‘Bitcoin-like’ alternative for establishments.” The lesson he attracts is easy. “They are saying worth drives the narrative.”
Crucially, Watkins doesn’t declare that these narratives are professional, however somewhat highlights the gaps they fill. “The purpose right here will not be whether or not that is justified. The purpose is that the shortage of an agreed-upon valuation methodology creates a vacuum that solely narratives and related frameworks can fill.”
He presents the competing bull case as an open speculation somewhat than a conviction: “Is the bull case for ETH a benchmark for world GDP? What about being a ‘programmable Bitcoin’ that’s primarily priceless? How about each? The reality is, nobody is aware of.”
He stated, “So what occurs when the market turns into fixated on relative values and narratives? BTC is $2 trillion. So who’s to say ETH should not be 50% of that? It offers a superset of Bitcoin options, proper? ETH is $500 billion. Why should not SOL be greater than 100% of that? Virtually your complete economic system.” It is a superb product with better traction within the discipline. “Metric system.”
He dismisses this as a “wacky” train, nevertheless it’s helpful for exploration. “We are able to theorize all we wish or discover the surroundings in entrance of us.” Till the fundamental precept is reaffirmed: “Don’t overthink.” In his final sentence, he clearly defines the sting: “There’s great aggressive benefit in belongings that penetrate the mainstream consciousness and persist over time. It is a sport of movement and narrative till the get together stops.”
Each views might be true on the similar time. Whereas the market might proceed to cost ETH primarily via narrative and relative worth, the query Szabo raises – whether or not Ethereum’s design can really bridge a sturdy hyperlink between community utility and token worth – stays unanswered. For now, the talk itself is a sign. ETH is shifting via a cycle the place consciousness of objective in addition to measurable money movement analogs set the tone.
At press time, ETH was buying and selling at $4,701.92.
Featured picture created with DALL.E, chart from TradingView.com
