Bankless Co-Founder Sells ETH but Stays Bullish on Ethereum

Bankless co-founder reallocates ETH but maintains Ethereum conviction

David Hoffman, co-founder of the popular crypto media outlet Bankless, has disclosed he sold a portion of his ETH holdings after reassessing the long-running 'ETH is money' thesis. In a May 26 post on X, Hoffman said the core narrative that drove ETH's valuation has largely unfolded. Still, he stressed that this decision does not signal a loss of faith in Ethereum's technology or its ecosystem.

Why Hoffman sold: a capital allocation shift, not a capitulation

Hoffman framed the move as an exercise in capital allocation. He explained that while Ethereum has earned its prominent market position, the potential for ETH itself to undergo another structural market rerating appears limited. The network can continue expanding its utility without proportional upside accruing to ETH as an asset, he argued.

This distinction matters for investors and builders. Ethereum's open-source architecture enables a rich economy of applications, layer-2 (L2) rollups, stablecoins, tokenized assets, and DeFi protocols. A significant portion of the economic value created on Ethereum can be captured by apps and L2 projects rather than flowing back to ETH, which could alter historical value-capture dynamics.

Stablecoins and payment rails: growth that may not boost ETH demand directly

Hoffman pointed to stablecoins as a major example. Ethereum now hosts a record supply of dollar-pegged tokens, strengthening the network as a settlement and payment layer. As previously reported, the stablecoin supply on Ethereum reached roughly $180 billion, accounting for nearly 60% of global stablecoin liquidity. While that drives transaction volume and real-world use, it can reinforce dollar-denominated payment rails rather than directly increasing demand for ETH.

At the same time, the Ethereum Foundation's updated treasury strategy — touched on by Vitalik Buterin — signals a leaner approach to ETH sales and a long-term focus on security, privacy, openness, and censorship resistance. Those governance and funding choices shape network incentives and the supply dynamics that underpin ETH as an asset.

Ethereum (ETH) price chart

Layer-2s and rollups: where value capture may concentrate

A central thread in Hoffman's reasoning is the role of layer-2 solutions. Rollups and L2 teams are becoming critical to Ethereum's scaling story, but they may also retain a larger slice of the value created on-chain. Hoffman advocates for L2s having the freedom to iterate quickly, yet he also emphasizes the need for stronger commercial and branding ties back to Ethereum so the ecosystem remains cohesive.

Industry efforts are already underway to reduce fragmentation. Recently, Gnosis, Zisk, and the Ethereum Foundation announced the Ethereum Economic Zone at EthCC, an initiative designed to standardize ETH as the gas token across participating rollups and to harmonize security and economic incentives across more than 20 L2s that secure roughly $40 billion in value.

ETH treasuries and institutional strategies

Hoffman's personal decision contrasts with a parallel trend: some public companies are building Ethereum-linked treasury strategies. Notably, firms with ETH on their balance sheets and related treasury services have attracted institutional attention and index inclusions that underscore corporate adoption of crypto exposure.

That divergence — an influential individual reallocating personal capital while institutions expand ETH treasuries — highlights the nuanced market signal. Ethereum's on-chain activity, protocol upgrades, and growing product set can coexist with evolving investor preferences about how to hold or gain exposure to that growth.

Market context and what this means for investors

Hoffman's sale comes amid a broader transition at Bankless and ongoing sector debates about value capture. Some see ETH as the primary beneficiary of Ethereum's growth; others, like Hoffman, foresee much of the economic upside flowing to applications and L2s. For traders and portfolio managers, that suggests a need for diversified positioning across protocol tokens, L2 tokens, and application-layer assets, alongside ETH.

At the time of Hoffman’s statement, ETH traded near $2,100 — roughly a 1% decline over 24 hours and a 2% drop on the week, per crypto.news data. Short-term price action matters to sentiment, but Hoffman's thesis centers on longer-term structural flows of value in the Ethereum economy.

Ethereum remains a foundational blockchain for stablecoins, DeFi, tokenization, and rollups. Hoffman’s move is an important data point in the ongoing discussion about which on-chain parties ultimately capture that value: ETH holders, L2 ecosystems, or the applications that run on top. Readers should consider both protocol-level fundamentals and ecosystem-level tokenomics when forming investment or development strategies.