On Ethereum's "Identity Crisis": Misunderstood Value

Author: Prathik Desai

Compiled and Edited by: BitpushNews

Introduction

Over the past two weeks, almost everything in the crypto community has centered on two things: the decline in Bitcoin’s price, and the macroeconomic environment driving it—CPI data, government stimulus, the AI bubble, liquidity, treasury yields, ETF outflows, the US Supreme Court’s rulings on tariffs, and other assorted factors.

But I want to talk about Ethereum’s chart and its journey over the past few years.

Ethereum’s price volatility is enough to make any crypto outsider believe that, for someone holding a large Ethereum portfolio, life is incredibly dull.

Many crypto Twitter (CT) users share a similar view of this Layer-1 blockchain, which has acquired numerous nicknames: the world computer, the future of internet infrastructure, the financial layer of the internet, and so on.

In today’s article, I’ll reflect on how Ethereum’s marketing problems have led to it being mispriced and misunderstood by the market regarding its potential.

To do this, I’ll reference an interview with Equilibrium Labs investment partners Mika Honkasalo and Saurabh Deshpande.

Here are the parts that left a deep impression on me.

Ethereum’s “Identity Crisis”: Misread Value

In this cycle, discussions about ETH are often emotionally charged. Whenever Bitcoin hits a new all-time high, the crypto community is filled with sarcasm about Ethereum’s underperformance, as if the second-largest network is obligated to follow Bitcoin’s lead.

There is nothing in Ethereum’s design that promises a “monetary premium.”

But I understand why the market has the wrong expectations for Ethereum.

Bitcoin has a single task and a single expectation: to be digital gold, a store of value whose dollar price appreciates as a result of its inherently limited supply.

Ethereum’s value, on the other hand, is pulled in multiple directions, balancing its core principles such as transparency, security, immutability, and programmability through smart contracts.

In this context, the Ethereum Foundation’s efforts (or lack thereof) to communicate its true aspirations have led people to misunderstand Ethereum as a currency, just like they see Bitcoin.

Here, there are two perspectives, and some call this an identity crisis stemming from marketing failures.

Brand Differentiation: Ethereum vs. Solana

Mika compared this to Solana’s brand promotion.

Despite the jokes and memes about Solana, the chain has marketed only a single message over two years: it’s building a “decentralized Nasdaq running at near the speed of light.”

You may disagree, but it has stuck to a consistent message—it hasn’t pretended to be ten different things or a currency equivalent.

Meanwhile, Ethereum’s narrative has always lacked coherence—sometimes calling itself the internet infrastructure of Web3, sometimes touting itself as “ultrasound money,” and sometimes packaging itself as “digital oil.”

While each label has its merit, they fail to coalesce into a standout core objective or a unified grand vision.

Although these ideas are not inherently wrong, they may create a disadvantage at the business level. This has led the market to simply categorize ETH under the monetary narrative, while in reality, the blockchain has long evolved into the infrastructure supporting decentralized finance protocols for Web3.

I appreciate Mika’s perspective of viewing crypto projects as cash-flow-generating entities rather than purely as money, but there’s a paradox: currently, Ethereum plays more of a settlement layer role, with most transactions, fees, and user activity actually taking place on cheaper and more efficient Layer 2 networks.

Therefore, when the market tries to anchor ETH’s value through the fee-burn mechanism, increased efficiency becomes an awkward statistic—the more activity migrates to L2, the weaker the mainnet’s deflationary effect becomes.

Ethereum’s Unique Edge: Performance of Digital Asset Treasuries (DATs)

There’s another viewpoint. Some might argue that there’s no need for Ethereum or its community members to market its intentions or purpose.

Ethereum’s uniqueness in certain areas stands out.

Take the way digital asset treasuries (DAT) operate. DATs with heavy Ethereum weighting outperform those with heavy Bitcoin weighting because staked ETH generates yield, while Bitcoin does not.

This single feature changes how these companies survive market cycles.

Bitcoin treasuries are like rollercoasters, fluctuating with market cycles. When the underlying asset rises, their balance sheets look like gold mines, but when liquidity dries up (as it is now), cracks beneath the surface start to show.

In the worst cases, when DATs rely almost solely on their Bitcoin treasuries with little other operating income, they often pay monthly bills by issuing new equity, as I’ve explained here. They have no yield component, no internal engine, and no way to make their assets work harder than the chart.

Ethereum DATs aren’t just holding ETH. They can stake, restake, and earn native yield. Treasuries denominated in ETH can participate in the economy they’re in. Staked ETH can insulate investors from market cycles.

This aspect of the story rarely makes it into Ethereum’s marketing, partly because the community refuses to market itself.

But if you strip away all these appearances and look at ETH’s actual performance from a treasury capital perspective, you’ll see its true asset qualities. Its value compounds continuously through actual use, on-chain activity, and ecosystem composability.

Mika ties Ethereum’s fate to its “ability to build products that a billion users truly need.” He also notes that, thanks to Coinbase’s distribution advantage, Base has become the most successful L2. I believe Ethereum’s future trajectory similarly depends on this core factor.

It doesn’t matter if Ethereum itself isn’t good at marketing—as long as it continues to be the underlying soil for DeFi projects, letting those projects achieve mainstream reach on its behalf. As long as applications, consumer products, and L2s continue to choose Ethereum as their settlement base, the network can win by sustaining demand for block space, generating a steady stream of fee revenue.

Its development path can trace AWS’s footsteps: from a slow-growing, low-margin internal experiment at Amazon, to ultimately becoming the company’s most important business pillar.