Ethereum, once viewed as the powerhouse of decentralized applications and smart contract technology, is now under scrutiny from some of the industry’s most respected voices. According to Sam Kazemian, founder of Frax and Everipedia, the native ETH token has lost its connection to the network’s growing utility. He argues that Ethereum’s economic shift following the introduction of EIP 1559 has driven ETH into a valuation trap, more akin to a tech stock than a digital commodity like Bitcoin.

Kazemian, sharing his thoughts on social media platform X, stated that while Ethereum continues to build robust infrastructure and positions itself as a global settlement layer, the ETH price doesn’t reflect that progress. He criticizes the prevailing narrative that emerged with the EIP 1559 upgrade, which burns a portion of transaction fees. While the crypto community largely embraced this mechanism as a bullish feature, similar to stock buybacks, Kazemian believes this comparison was a serious misstep. Instead of being viewed as a scarce digital resource like gold, ETH is now valued through a corporate-style price-to-earnings lens—one that doesn’t benefit from its actual usage on the blockchain.

He further emphasized that, had Bitcoin implemented a similar mechanism, it would have harmed its long-standing identity as a “digital gold” asset. In his view, Ethereum’s attempt to mimic corporate valuation frameworks has weakened ETH’s narrative and made it harder for the token to maintain relevance in an increasingly competitive market.

Supporting Kazemian’s concerns is the ongoing underperformance of ETH against Bitcoin. As of April 12, the ETH/BTC trading pair hit a new multi-year low of 0.18666, meaning that one Bitcoin now equals over 53 ETH. This ratio hasn’t been this low since early 2020, reflecting Ethereum’s continued struggle to keep up with Bitcoin’s momentum.

Nic Puckrin, CEO of Coin Bureau, echoed this concern in a recent thread. He noted that despite Ethereum’s technical advancements, its position in the market has weakened. The rise of alternative Layer-1 blockchains has chipped away at Ethereum’s dominance in the smart contract space. At the same time, Ethereum-based Layer-2 solutions such as Arbitrum and Optimism, though built on Ethereum, divert value and liquidity away from the native ETH token. As a result, the actual use of Ethereum infrastructure doesn’t necessarily translate into a higher ETH price.

Adding to Ethereum’s challenge is the lack of institutional interest in ETH compared to Bitcoin. With the introduction of spot ETFs and increasing adoption of Bitcoin by traditional financial players, BTC continues to strengthen its position as the go-to digital asset for large-scale investors. Ethereum, by contrast, struggles to attract the same level of institutional confidence.

While Ethereum remains a technological leader and continues to innovate with rollups, zero-knowledge proofs, and its transition toward Ethereum 2.0, the price of ETH may continue to suffer unless its valuation model is rethought. Critics argue that Ethereum needs to re-establish ETH’s role as a scarce and essential resource within the network, rather than as a speculative asset modeled on tech stocks.

For now, ETH’s journey is a tale of technological excellence shadowed by a disconnect in value perception. Whether this narrative can shift back in Ethereum’s favor remains to be seen.