25万美元的 ETH 论点：为何华尔街押注 ETH 跑赢黄金和 Bitcoin

The core idea behind this is that most people view ETH as a technology bet. Our view is that ETH is actually better money than Bitcoin, and I think it’s our best chance to fulfill Satoshi’s original vision of peer-to-peer electronic cash.

The crux of the argument is that there are traditional monetary attributes on which monetary goods are evaluated. Going all the way back to Carl Menger’s essay “On the Origins of Money” in the late 1800s, he identified all the qualities that make good money. We basically evaluate Ethereum, Bitcoin, and gold along these monetary attributes.

Our argument is that ETH either meets or exceeds Bitcoin and gold on each of those qualities, including scarcity and transportability. But we believe that it’s superior in terms of durability and security. We think proof of stake is a more secure consensus mechanism than proof of work.

The other huge thing, which is the title of the report, is that it’s productive. The reason Warren Buffett has never held gold is because it doesn’t compound. You own 1 oz. of gold today, and 100 years from now you’ll still own 1 oz. of gold. That’s true of Bitcoin as well.

His argument has always been, “I’d rather own a productive asset like ExxonMobil or farmland that will compound over time. Compounding is the eighth wonder of the world.” Ethereum is the first monetary good, kind of like cattle, that actually compounds.

You can stake it without counterparty risk by helping secure the network, and you’ll receive a yield on that. If you have 100 ETH today and you can stake that at 2% or 3%, you’ll have 102 or 103 ETH next year, and that makes a huge difference in terms of the return to the asset. Over time, we believe that a productive asset will outcompete dead capital.

Guys, so excited to have you back. Sometimes I just wish we could include the little preamble that we do before, but we’re super bullish on Etherealize.

We wanted to talk today about a report that you just released. You released a report called “Ethereum and the Era of Productive Money.” We’re going to walk through the core ideas and talk about things like what productive money even is and how ETH should be viewed against gold and Bitcoin.

We’re going to talk about Larry Fink’s comments when he said Ethereum is the tokenization toll road and what that actually means. And, of course, this big thesis of $250,000 ETH. We’re definitely going to get into that.

But as we were talking before, I didn’t know that Vivek and Michael knew each other. Maybe just tell us a bit about how you know each other and your roles at Etherealize.

I’ll kick it off. A lot of this, I’m just inspired by how full circle everything’s coming with Ethereum and Wall Street, with all of these converging together in a pretty beautiful way.

When I was on Wall Street as a sell-side credit trader for my 12 years, I met Mike. Mike was a buy-side client. When I was at Morgan Stanley selling bonds, Mike was on the other side doing research and buying bonds.

I’ll let him go into his background, but we knew each other socially. We were very intellectual. We would go look at trades together, and we collaborated a lot on the Wall Street front.

Skipping to the punchline, when I pulled the plug and quit Wall Street, got into Ethereum, started writing about Ethereum, and became one of the only Wall Street institutional voices that was just an ETH maxi bull, another guy happened to pop up, and it was Mike McGuiness.

He published a really viral essay, which he can talk about. It’s been a long time coming for our paths to converge, but it kind of feels like a homecoming again.

Yeah, we knew each other from our Wall Street days, and then we both got into the Ethereum community. Vivek built Etherealize. I built my own startup called gm.xyz. It was kind of like Farcaster around the time that Farcaster got started.

We raised a big seed round from some really great investors, like Naval Ravikant, Alexis Ohanian, and Balaji Srinivasan. We really believed in this idea of decentralized social, and I still kind of believe it’ll happen today. I just think it was a little too early. We ended up returning that money.

I reached out to Vivek to see how I could get back involved with the Ethereum community. I was super inspired by what he’s building at Etherealize and wanted to see how I could help.

There’s always been this vacuum of really high-quality research about ETH as an asset and the Ethereum network. I thought I could help out there. I’ve recently started producing research in collaboration with Etherealize, and that’s where this report came from.

1. Core thesis: ETH is better money than BTC or gold

The report is titled “Ethereum and the Era of Productive Money.” Why don’t we start there with more on the core idea behind the report? What are you trying to convince the market of?

The core idea behind this is that most people view ETH as a technology bet. Our view is that ETH is actually better money than Bitcoin, and I think it’s our best chance to fulfill Satoshi’s original vision of peer-to-peer electronic cash.

The crux of the argument is that there are traditional monetary attributes on which monetary goods are evaluated. Going all the way back to Carl Menger’s essay “On the Origins of Money” in the late 1800s, he identified all the qualities that make good money. We basically evaluate Ethereum, Bitcoin, and gold along these monetary attributes.

Bitcoin famously improved on gold through transportability. You could send it over a communication channel. Bitcoin also has a fixed supply, which gold does not, with the 21 million hard cap.

Our argument is that ETH either meets or exceeds Bitcoin and gold on each of those qualities. It has scarcity and transportability, but we believe that it’s superior in terms of durability and security. We think proof of stake is a more secure consensus mechanism than proof of work.

The other huge thing, which is the title of the report, is that it’s productive. If you look at the reason Warren Buffett has never held gold, it’s because it doesn’t compound. You own 1 oz. of gold today, and 100 years from now you’ll still own 1 oz. of gold. That’s true of Bitcoin as well.

His argument has always been, “I’d rather own a productive asset like ExxonMobil or farmland that will compound over time. Compounding is the eighth wonder of the world.” Ethereum is the first monetary good, kind of like cattle, that actually compounds.

You can stake it without counterparty risk by helping secure the network, and you’ll receive a yield on that. If you have 100 ETH today and you can stake that at 2% or 3%, you’ll have 102 or 103 ETH next year, and that makes a huge difference in terms of the return to the asset. Over time, we believe that a productive asset will outcompete dead capital.

2. What is productive money?

I love how you mentioned cattle in there. Funny enough, I used to own 40 head of cattle at one point, and I own cryptocurrency now.

I don't know if there's a commonality between those things, probably not. But you wouldn't have to convince either myself or DeFi Dad that ETH is productive money. I think both of us have been using it as productive money for a long period of time now.

But can we just drill into that term a little bit more, in simple terms? You did a good job there, but in simple terms, what does that actually mean to the common person hearing this? I'm picturing my dad listening to this podcast. What does productive money mean to somebody who's not as exposed to crypto as we are?

I'll start it off because part of our dual mandate at Etherealize is, one, to build the infrastructure that's going to help ETH—Ethereum—win, and second, to make ETH understood, which has always been the hardest part of ETH. The greatest attribute of ETH is also the greatest liability—or opportunity for now—which is that it can do so many things that it's difficult to understand what it is.

We think productive money is the end game for how you can actually think about ETH, and it's time to accelerate that end game because crypto adoption is here. People are allocating to crypto portfolios, and they're now institutional-grade assets. What does it mean to have productive money? It means to have an asset that's a store of value that also has a yield attached to it.

So that simply becomes a part of a portfolio that we think is superior to Bitcoin. We think it's ultimately superior to gold, and it's an asset that no one's seen before because you can hold it, it holds value, it underpins the entire Ethereum economy, and you get a yield on top.

And just to add to that, I think the easiest way to explain it to somebody else is to juxtapose it with gold or Bitcoin, which you basically can't do anything with. You store it, and then you hope it's worth more later. Whereas with ETH, you stake it, you secure the network, and then you can build the entire financial infrastructure on that network, and you're being compensated for securing that network. So it's not just sitting in a vault; it's actually providing utility and is beneficial for society.

3. Is Wall Street buying the story of ETH as productive money?

There was a quote in the report that stood out. An investor named Warren Buffett said, “Gold has two significant shortcomings, being neither of much use nor procreative. If you own 1 oz. of gold for an eternity, you will still own 1 oz. of it at its end.”

I know that the critique previously, even for a digital gold like Bitcoin, has been that you couldn't really do much with it. Obviously, Ethereum is what really gave it that much more utility, being able to borrow against it, use it in a tokenized wrapper as maybe part of a liquidity provision.

I guess what can you tell us more about the story that you tell to institutional-type investors or investors on Wall Street? Are they getting this difference between what Bitcoin is and what ETH is as a more productive asset?

So, they're starting to, and it's starting to accelerate on the understanding curve, which is why we said, “Let's just pull forward productive money,” because it is, again, the end state.

BlackRock just launched its ETH ETF, and as part of that, that's a staked ETH ETF. In the marketing around that, they said, “ETH is an asset that actually generates a yield.” So you're not just holding a digital asset store of value anymore; you're holding a digital asset store of value that has yield on it. That starts to look like how Wall Street thinks about US Treasuries.

US Treasuries are pristine collateral. I mean, they're backed by the US, which you could argue is the least amount of counterparty risk. ETH takes that one step further and says, “Okay, here's a system with no counterparty risk and a yield, and it's the collateral—it's the only collateral asset that transfers around the world without any one party that can censor it or stop it.”

That's all Wall Street speak. People want to minimize counterparty risk. People want perfect collateral, and people want yield. ETH packages that all together.

We always said Bitcoin was the idea, and Bitcoin is now understood. People get, “Okay, it's digital gold.” But the final form, the actual expression of the potential—which Mike can talk about, about Satoshi's vision—is what ETH is fulfilling, which is productive money.

And just a good anecdote on whether Wall Street understands this is that Stanley Druckenmiller gave an interview—was it 1 month ago or 2 months ago?—with Morgan Stanley, and he was talking about Bitcoin. He said, “Yeah, it's digital gold, but I don't really see much of a need for it.” He was actually kind of bearish on it, but said, “I guess it now exists.”

But he was much more bullish on stablecoins, right? Because that makes our entire financial infrastructure way more efficient. It's going to be huge. And that's the other aspect of what we mean by productive: it's actually providing utility, and people are benefiting from it. It's not just pure speculation, which I think is hugely important if you want people to invest in it, right? Ideally, your capital should have a return on it if you're expending your capital well.

Yeah, and I don't want to drill into this too much, but this has always made sense to me. I literally borrow against my ETH and use it productively for my everyday life. I know that's not something that's very distributed in society yet, but I think it will become more and more.

As you've mentioned, there's no counterparty risk with ETH, right? It's the asset that was built to be used on the native network of Ethereum, and it feels very safe to me. So it's just great if these ideas become more and more realized by a broader group of people than just crypto natives or crypto degens, whatever.

4. The institutional crypto bull market

I want to get into even more of what some of these institutional players are saying about Ethereum. You mentioned Druckenmiller, but probably one of the loudest voices that I've heard recently about Ethereum is Larry Fink, and he had this incredible line where he calls Ethereum the toll road to tokenization.

5. Vivek and Michael’s background on Wall Street

I want to talk a bit more about that. You guys are behind the scenes talking to all these players day to day, and I would just love to get into what they're actually seeing and feeling with Ethereum and tokenization. Is this actually about to blow up in a big way on Ethereum? Maybe just give us some insights into what you're seeing.

I mean, it already is blowing up in a big way. That's the coolest part. We've been in this really small—and becoming smaller—bubble of Crypto Twitter and crypto land, where we go through cycles and people are pretty bearish because asset prices have come down.

But on the flip side, we're seeing the biggest secular and structural institutional bull market that I've ever seen in my watching crypto for the last 10 years, and it's not only 10x as big; it's 100x as big as anything before.

Now, it's not even, “Will things be tokenized?” It's, “How fast can we tokenize?” It's not just, “Are we allowed to bring assets on-chain?” It's, “What do we need to bring assets on-chain as quickly as possible?” And this isn't just institutional; it's also policy.

I mean, we talk to policymakers globally, but I'm focused on the US, and there is a real race to create a structural framework for the US to lead and the rest of the world to also participate in a digital assets renaissance. We saw how fast AI accelerated. The same thing is happening in the blockchain space.

6. Three demand drivers for ETH: gas, collateral, and staking

So it is an Ethereum bull market, and we think it's inevitable that ETH the asset has a significant repricing. So we said, “You know what? It's time to, in this whole bull market framework where the world is going to get tokenized, stablecoins are going to become the default for using dollars on-chain or using dollars anywhere, ETH will become the productive money in this whole economy.”

There was an argument, or there was a model—a mental model—that I latched onto early on when I was first learning about Ethereum. It was the idea that it was the highway, or in this case the toll road, for tokenization.

At the time, it was just whatever; it was seen as an L1, and it was the second-largest cryptocurrency, the number-one smart-contract platform in the world. That mental model, though, I do think came back to bite us in the ass years later when folks were trying to distinguish Ethereum's success as a network and ETH the asset.

There's another argument you make in the report: ETH is not just the toll road; it is the collateral layer of the system. Why is that distinction important?

Right. So the toll road to tokenization is really talking about gas, right? To use the network, every time you want to make a transaction, you have to pay a small fee, and then a portion of that fee will get burned, and the other portion will go to people who are staking their ETH and being paid out as staking yield, right?

So as more and more assets get tokenized and Ethereum becomes a global settlement layer, gas will drive a lot of demand for ETH because you have to pay for those transactions in ETH, right? So that's one demand driver.

Another demand driver is using it as collateral in DeFi, right? If ETH is really the only asset in the network without counterparty risk, right? So if you tokenize a dollar, you're exposed to Circle as your counterparty or Tether as your counterparty, and you have to trust that they have those dollars somewhere off-chain and that they'll give them back to you if you go and redeem that token.

That's not true with ETH. You don't have to trust anybody with ETH, and because of that, ETH is the most pristine collateral in the Ethereum ecosystem, right? You can use it in a protocol like Uniswap to provide liquidity. I think ETH is the most common trading pair there, right? So, that creates demand for ETH.

I think ETH is the most heavily used collateral in Aave if you want to borrow against it. So, all these use cases—if you want to borrow against it or provide liquidity in an AMM—create additional demand for ETH on top of the fee and gas demand as well. The third demand driver is staking, right? You can get paid for securing the network, and roughly a third of all ETH is staked right now, too.

7. Why ETH wasn’t reaching its full potential until recently

Coinbase's institutional research framed these as demand sinks. They're taking the supply of ETH off the market. So, you have 3 big drivers right there.

I think a lot of the concepts that you're talking through, too, the real shortcoming—the reason that DeFi, Ethereum, and crypto assets in general have been difficult to communicate from day 1, going back to the origin of Bitcoin—is that a lot of these concepts are just not well understood across the society we live in. A lot of these finance concepts are easy for folks who work in the finance industry, and that's why so many people working with you all years ago saw the light with Ethereum and DeFi very early on.

It's something that I've personally struggled with over the years, trying to explain to friends. I just had a buddy today—it's funny, he's a baseball coach—asking me about crypto in general. It's crazy: after all these years, I've been focused on Ethereum specifically for almost 10 years, and I still struggle to communicate the simplest selling points in just a few texts.

The difference now is the credibility that Ethereum and ETH, the asset, have. I'm able to say, “Hey, if you're not comfortable buying ETH yourself or getting comfortable with Coinbase, no worries. Did you know that there's this thing called an ETF?” “What's an ETF?” “Oh, well, do you ever hold gold?” “Oh, yeah. Okay, yeah, I know what that is.” “Cool. There's the same thing. Who can I buy it from?” “Oh, BlackRock. BlackRock has a staking ETH ETF, and by the way, you get 2% to 3% return annually just for holding that.”

The story's gotten so much better and so much more credible. But again, there's still a chasm to cross, and it's because there's a need to teach our children more about finance and economics. That's part of it. The other part I'll say, too, is timing. ETH was not allowed to be institutionally used or reach institutional scale until exactly 1 year ago, when the GENIUS Act passed.

It really was always an inevitability. It was a when, not if, for ETH to take off—for Ethereum to take off—and that time is now. Part of our job, and it will be our forever job at Etherealize, is to keep educating, because at some point it clicks. When it clicks, people will see that, going back to it, ETH can do so many things.

As Mike said, there's staking, there's intrinsic value from gas, and there's also collateral. It's hard for someone to comprehend all of those wrapped into 1, and so that's been part of the shortcoming. That's kept ETH from reaching its potential. But now the flip side happens when you start to see all the use cases and say, “This is now all wrapped up.” Now you have 1 money that's productive for the whole crypto ecosystem—not only something that humans will use, but something AI agents will use—and it will be a store of value. It'll flip, and we're going to have our inflection point for ETH. Again, we think that's coming right now.

The other point I'll say is that the people who understand best the value of pristine collateral, the value of having lower counterparty risk, and the value of decentralization itself are, ironically, the institutions. The retail people will follow, and they'll care when this is all part of automatically allocated portfolios, but the institutions get it.

They don't want to use other people's chains, and they don't want to use other people's assets. The more tokenized assets we have that have counterparty risk and anchors to different institutions, the more ETH is going to shine as the medium of exchange between all of those. That's all coming now, but that's why we've been pitching institutions so much, and we'll continue to do so.

8. What needed to happen in order for ETH to reprice?

I forget it's only been a year since more regulatory clarity opened up. I feel like Bitcoin could exist because it did nothing, but Ethereum was trying to exist and do literally everything in finance, right? So, of course, it was under more scrutiny. But you're so right. Even somebody in the space 24/7 like myself, I forget that it wasn't really allowed to flourish. So, yeah, it's only been a year.

I want to talk a bit more about, in the report, how you obviously lean into ETH pretty heavily as a monetary asset, and we'll get to your massive prediction soon on price. But I want to know a little bit more about what needs to happen for the market to start pricing it that way and realizing its worth, because I know so many people just try to look at everything through the revenue lens. There's so much more happening here that I think will be accounted for soon, but I'd love to hear your answer and what you think needs to happen.

Yeah, I think a huge aspect of this is that ETH wasn't very good money until the Merge, right? The Merge was what convinced me, because I was a Bitcoiner before the Merge. I thought going after the store-of-value or money TAM was the biggest market ever, right? So, why would I bet on anything secondary to that?

For a while, it looked like Bitcoin was best suited to win that by far. It had the simplest narrative, the protocol didn't change, it was the most secure, and it made for the best money. At the time, before the Merge, ETH was very inflationary. I think it had about an 8% inflation rate.

After the Merge, there's a cap on issuance at 1.5%—the maximum issuance, or maximum inflation rate, for Ethereum. You also had the burn mechanism with EIP-1559, which actually burned ETH and made ETH deflationary for a little bit. Maybe you'll see that again if tokenization and global settlement become as big as we think they'll be.

That's answer number 1: it wasn't very good money until about 5 years ago. Another thing is that there was a lot of competition. For about 3 years after the Merge, ETH didn't scale at all, right? I think the gas limit stayed the same for 3 years. Was that 30 gas per block?

You had a ton of competition. You had the Solanas and these alt-L1s that really pounced on that and won some market share. Only recently has Ethereum solved these issues, right? The total throughput of the chain doubled in 2025. The plan is for it to triple roughly every year going forward.

With the zkEVM, there's a path—Justin Drake calls for 10,000 transactions per second—which is more than the throughput of Solana's chain right now. It also became clear recently that Ethereum's network effects are almost insurmountable. As Erik Voorhees put it, ETH is still king.

If you look at DeFi, 60% of DeFi and 60% of stablecoins are all on ETH right now, and nobody's even close. I think Solana has about 6% of total value locked in DeFi, the last time I checked. So, ETH's DeFi ecosystem is 10x the size of Solana's.

Those 2 things, in my view—ETH wasn't very good money until about 5 years ago, and then it faced a lot of competition—have only now made it obvious that ETH is emerging as the king and its network effects are becoming unassailable. You also have a lot of changes to the protocol happening over the next 3 years as Ethereum goes post-quantum. It's taking the lead on that and being very proactive. You have the zkEVM upgrade.

The best money doesn't change, right? Bitcoiners have committed to that.

But my view is that Ethereum is sacrificing short-term stability for long-term viability. After these upgrades are through, you'll start to see the protocol ossify, and they will have addressed all the existential problems that Bitcoin has just kicked the can on. It'll become clear to everybody over time that ETH is the better money. But there are all these risks in the interim, so I think you're getting paid for those risks; that's how I view it. As the protocol ossifies, you'll see it start to reprice over time, is my current view.

9. Distribution channels: ETFs, Schwab, Tom Lee

The other part I'd add to it, too, is that the channels weren't set up for ETH to hit its maximum potential as a store-of-value asset. Before, it was again just Bitcoin, and there weren't as many venues for ETH to hit retail distribution and mass adoption. Michael Saylor started MicroStrategy's Bitcoin strategy in, what, 2020 or 2021, and so that became a retail vehicle for Bitcoin. Then Bitcoin was offered on exchanges through the Bitcoin ETF way before.

Now, we not only have the ETH ETFs, we not only have Tom Lee. I would argue that I'm waiting for BitMine's market cap to flip MicroStrategy's market cap. I think that's going to happen. And with him being a champion for ETH to the retail and broader audience, we also have players like Charles Schwab, which just announced that they're going to offer 2 spot-traded tokens. One is Bitcoin; the other is ETH.

Very quickly, every offering is becoming Bitcoin and ETH. That's very important because then people will start to say, “Okay, I'm going to own some Bitcoin. I'm going to own some ETH.” As they start to look into it more, it's not 90/10 anymore. I mean, Charles Schwab just recommended a 2:1 ratio. And again, as people keep double-clicking deeper, Bitcoin has some chinks in the armor.

I hope Bitcoin does well because it carries a lot of the crypto industry, but it does have an unsolved quantum roadmap. It does have proof-of-work overhang and block subsidies coming down. I know we'll talk about that later, but when people start looking at ETH on a comparative basis, they're going to say, “Why don't I own a little bit more ETH than I owned before?” Why don't I own potentially 50/50? At some point it'll be like, “Why don't I own more ETH than I own Bitcoin?”

10. Bitcoin's security budget problem

You're seeing that. I mean, the Harvard endowment swapped out some of its Bitcoin ETF for an ETH ETF earlier this year. The distribution channels are open, so now people can actually allocate to both assets, and that's what's going to create the next wave of buy pressure.

And I think that last point is so important because that's ultimately what convinced me to switch from Bitcoin—to swap all my Bitcoin into ETH—was the security budget, right? I think as more and more people are either unaware or intentionally burying their heads in the sand and not paying attention to it because they're like, “It's 100 years from now. We don't have to worry about it,” I do think the declining block subsidy is an existential threat.

I think there are 2 solutions for Bitcoin. One is to add tail issuance: remove the 21 million hard cap and keep the block subsidy going in perpetuity to pay the miners to secure the network. Or 2 is to migrate to proof of stake, which would sacrifice their core advantage, the ossification of the protocol. If you're going to upgrade and change the protocol once, you might as well just add smart contracts, too. But by that point, you've just reinvented Ethereum about a decade late.

11. Ethereum’s censorship resistance, decentralization, and predictability

I haven't honestly been as worried lately about these Bitcoin security issues per se, long-term. The thing I've paid probably the closest attention to is that my portfolio on any given day is probably 25% Bitcoin and 75% ETH. I still sleep well at night holding the 2 assets for similar but different reasons.

The most important reason I hold both of them—and this is what was frustrating me with ETH the asset last year—is that it was part of the reason we had Ryan Berckmans on. I think one of the most important interviews we did over the past 3 years was Ryan Berckmans talking about all of the mischaracterizations of ETH the asset, the misinformation that had been rampantly spread by alt-L1s, and why Ethereum's network effects were well positioned for all of the growth and all of the momentum to flip in our favor in the past year.

It was also the reason we had Vivek and Danny on from Etherealize. The reason I hold the 2 assets, and I think the most important characteristic of ETH that we're talking about here, is the censorship resistance. It is the ability to hold ETH and know that if I'm holding ETH, especially in a self-custodial wallet, I know that I have property rights to a digitally scarce asset that powers a network that is decentralized and ultimately is going to keep running because the economics behind it incentivize all of us—whether you're a validator, a developer, or a dapp—to continue to work together.

It's very difficult to reach that escape velocity. There's a reason that there's so much money now in the Bitcoin and ETH ETFs. What I'm just thrilled about, though, is the censorship resistance, the predictability of the ETH network, and the trust that users had in putting their money on Ethereum.

The reason that there's, I think, something close to $300 in capital sitting on just Ethereum mainnet versus, I think the last I checked, $80 billion on Tron and then sub-$20 billion on other L1s is, again, the predictability of being able to open your laptop tomorrow, use your self-custody wallet, and access those digitally scarce assets.

For whatever reason, that censorship resistance, in my opinion, was being misframed and disrespected over many years. It was the idea that we needed L1s that were basically continually developing for high-throughput types of applications. What we've seen now is that, as Ethereum is scaling, the most important thing is to have that base layer that we can rely upon, that we can use for stablecoin-related transactions and all the different DeFi that happens there.

It's a more premium block space, and thankfully, with the scaling roadmap and lots of other work that's being done—not just for layer 1 but also through the work of L2s—now we're getting to a place where basically anything you would have done on a quote-unquote high-throughput, next-generation L1, you can do now. You will be able to do it through Ethereum L1 and additional layers on top of that.

I just could never understand that. It's like Bitcoin keeps being respected for being, again, predictable and unchanging. And for whatever reason, Ethereum was being penalized for this. ETH the asset was being looked at like a dinosaur asset, and that again has just violently repriced with all of the credibility that's fed into the space this past year because of people like Larry Fink, who are leaning in and saying, “Hey, this is the only safe network for us to be using at this point.”

I not only agree with that, but I just think that's what's setting the stage for ETH the asset to become a core portfolio holding. We were before in a spot, like you said, where ossification was viewed as a good thing. I think the other point you brought up was that technology is going a lot faster. Everyone's paradigm is shifting and saying, “Okay, well, what's the world going to look like in 1, 2, 3 years?”

Obviously, AI has made everything exponential and thrown everything into question. So things like quantum, which were problems you could kick out to much later, are actually going to get pulled forward. Things like the security budget, which you could kick out to much later, are going to get pulled forward. It is a feature to be able to take a decentralized network and future-proof it, and only ETH is going to be able to do that in a decentralized way.

If Bitcoin upgrades, great. Again, I hope it does, because we want Bitcoin to be around. But in a post-quantum world, that's going to be ETH. In an AI-agent world, you need to be on a network that has smart contracts. And that's unfortunately not Bitcoin, because there are no smart contracts.

Ethereum—the Ethereum network—is where a lot of agents will transact. So what is the money that they're going to hold? What's the store of value they're going to keep their assets in? They're not going to want USDC and have Circle potentially censor AI agents. So it's going to end up being ETH. ETH's time to rise as the collateral and the money for humans and AI in a post-quantum world is now. And I think it's all going to accelerate because the paradigm has shifted.

12. The path to $250,000 ETH price

Okay, guys, with all that being said, still, where do you get the audacity to call for $250,000 per ETH? Tell us what went into that number.

Yeah, so this might actually be the simplest part of the whole report. Basically, you look at just the monetary premium that currently exists in gold and Bitcoin. If ETH is better money than gold and Bitcoin, it should capture the monetary premium of those 2 assets. Right now, gold has a market cap of roughly $30 trillion, and Bitcoin has a market cap of $1.5 trillion. If you divide that by 121 million ETH, you arrive at a price target somewhere between $250,000 and $300,000.

Right? So if you truly believe that ETH is better money than Bitcoin and gold, then I view those as rough TAMs for a scarce asset without counterparty risk. That’s what gold is, and that’s what Bitcoin is. It’s actually a pretty simple calculation. So that’s how you get there.

I actually think that could end up being low because it doesn’t even incorporate things like the broader money supply. I think M2 is like $22 trillion. There’s a monetary premium in, for example, luxury real estate, where you’re not buying an apartment in New York City for the cash flows; it’s just a store of value. If the world converged on 1 unified store of value, it might win that monetary premium as well.

So, it’s kind of like you take the TAM of total monetary premium and divide it by the number of ETH. Vivek, sorry, anything to add there before I have another follow-up? I wasn’t sure if you were going to say something.

No, I just think it sounds audacious, but Ethereum’s audacious. It’s a new technology. People need to start thinking in exponentials. ETH has been basically sideways for a very long time, for 5 years, and we’re all painfully aware of it. But that’s because when things go exponential, they’ll break past what anyone’s mental frameworks are. So, I think we need to think bigger; all of us do.

I think it’s important that investors are starting to realize, too, that it’s not just a discounted cash flow model. Ethereum isn’t a software company, and it’s not a tech multiple or tech company. It’s literally going for money. The repricing from an asset that’s not quite understood yet, but is rapidly going up the understanding curve, to productive money that’s the reserve collateral asset the whole world uses—it’s not something that’s going to stop at 10x or something.

It’s something that can actually become as universal as Bitcoin and gold combined. That’s the opportunity. There aren’t that many assets out there where you have an intrinsic value floor, which Michael McGuiness brought up in the report, where there’s actual fundamental value, but there’s also a monetary premium, and you have the ability to capture the upside of the growth of an entire network.

It’d be like owning the internet early on. That’s what ETH is. It’s one of the greatest setups, one of the greatest assets I’ve ever seen. I think it’s finally going to have its time.

Sorry, really quick, but I know that number can sound kind of crazy on the surface level. One sanity check I like to do, which I think is a pretty interesting way of framing it, is that there are about 60 million millionaires in the world, right? And there are 121 million ETH. So, if every millionaire globally tried to buy some ETH, at most they’d each be able to own 2, right?

Obviously, there are a lot of people out there who own a lot more than 2 ETH, right? So, it’d be less than that. That kind of gets you to around those few hundred thousand to a million-dollar price targets. That’s how you could think about it. I used to think about Bitcoin the same way.

It’s just a nice sanity check: if this is the global reserve asset and the world converges on it and everybody tries to buy it, how much is left to go around? It’s an interesting heuristic.

Oh yeah, I love those ones. As someone who got into Bitcoin first myself, I totally remember that same line of thinking with the 21 million Bitcoin, right? It’s totally applicable to this as well.

13. Bitcoin's coordination problem vs Ethereum's shipping velocity

And I want to go back to something Vivek said about the speed and pace of technology lately: Bitcoin is facing some existential threats. What we haven’t seen that community be able to do—and I say this as somebody who owns Bitcoin and is worried about it—is come together, make decisions in a cohesive manner, and get things done.

From where I stand, that almost doesn’t exist anymore in the Bitcoin environment that I see today. What I see in the Ethereum community is that we’ve talked about shipping and getting prepared for quantum before it was even really a rallying cry. Ethereum has refined its upgrade abilities and its coordination mechanisms for developer communities, and now they’re pushing for 2 upgrades per year rather than 1.

It’s just proof that these are technology assets and digital assets. You’re going to need to refine things technically if you want to stay relevant and outpace some of these existential threats that I mentioned. That is a huge worry to me, and I think that feeds into your thesis of maybe overtaking some of Bitcoin’s value capture.

14. The Ethereum roadmap and AI accelerating scaling expectations

The gold component as well is totally obvious to me. That’s always been obvious with digital assets versus gold. This brings me back to the upgrade timeline Michael was talking about.

Justin Drake put it out and called it the Strawmap, with some very ambitious goals to achieve by 2029. Something interesting that both Justin and Vitalik mentioned was that none of that roadmap took into account AI developments, such as iterations in things like Claude helping out with the Ethereum developer community. That whole Strawmap is just shipped by humans.

My personal hot take is that they’re actually going to ship this faster than people think. The general consensus is usually, “Okay, we’ll add 2 years to the timeline,” but I actually think this could be a case where they beat expectations. I’m curious if you guys have thought about that or have any thoughts on it.

I absolutely agree vehemently. We all have, quote-unquote, Ethereum PTSD from delays and upgrades taking too long, and we’ve all been waiting for a long time. No one’s ready for Ethereum to actually ship faster than we think. No one’s ready for Ethereum to actually go into the driver’s seat and winning mode while retaining the most important quality, which is decentralization.

As software becomes more commoditized and development cycles get faster and faster, it’s going to be easier and easier to spin up new chains. But the 1 thing that no one can recreate is a fully decentralized smart contract chain. Ethereum started with proof of work. I agree with Michael that it became better money when it moved to proof of stake, but Ethereum starting as proof of work created this giant decentralized network and distributed set of holders.

Ethereum has the largest number of nodes that can’t be recreated. Anyone who wants to cut corners and try to create a blockchain needs a tiny validator set or a centralized validator set. Everyone knows what the trade-offs are. Ethereum has the best of both worlds: it went slow when it needed to during regulatory overhang and while having this proof-of-work backdrop to decentralize the network.

Now Ethereum can go a lot faster than people think. I do think that we’re going to deliver the Strawmap way, way faster. It’s going to be post-quantum money way faster. It’s going to be money for AI agents way faster than we think. I think it’ll flip Bitcoin faster than we think as well.

I think that needs to happen during a bull cycle. To re-diversify away potential risk from Bitcoin, you have both of these at parity.

Yeah, and I think Vitalik actually tweeted that he wouldn’t be surprised to see the roadmap accelerate with the advent of AI. To riff on your earlier point, I totally agree. There was this meme that Bitcoin would just absorb all innovation, kind of like early on in the Bitcoin community.

Where that really stopped happening was with the block-size war in 2017. You had the big blockers and the institutions that wanted to increase the block size so that you could fulfill the original vision of peer-to-peer electronic cash. Then you had the small blockers, who didn’t like these institutions coming in and controlling it, didn’t want to change the protocol at all, and wanted it to be more like digital gold rather than peer-to-peer electronic cash.

The small blockers won, and that ossified the Bitcoin culture around not changing the protocol at all and not absorbing new technology. It’s kind of been that way for almost 10 years now. I think that’s really problematic because my view is that Ethereum is our best shot at fulfilling the original vision of peer-to-peer electronic cash.

If you think about how the monetization of a monetary good goes through 4 stages, it starts as a commodity or a collectible, right? Then it’s a store of value. If it’s scarce enough, it’ll maintain its value and become valuable.

And then it’ll become a medium of exchange, and then it’ll become a unit of account. So Bitcoin kind of just stopped at the store of value, and they’re like, “This is good,” but that’s only step 2 if you want to create true peer-to-peer electronic cash. They’re not upgrading the protocol, and the Lightning Network and L2s on top of Bitcoin, which were supposed to be how they scaled, never really worked because they never really changed the underlying protocol. Ethereum is kind of going all the way.

Right now, it’s at the store-of-value stage. It’s already being used as a medium of exchange with NFTs and some of these AMMs. Hopefully, over time, as the protocol ossifies and truly becomes money and becomes established—I don’t know if it’ll take 5 years, 10 years, 20 years, or 50 years—it’ll become that unit of account and that peer-to-peer electronic cash.

The meme will be true for Ethereum, especially with the advent of AI, which makes it easier to absorb all the innovation from other chains. Then you have L2s on top of it. Justin Drake has talked about having 10,000 transactions per second on mainnet, and with L2s, you’ll get to millions of transactions per second, which is more than Visa. That’s how you create true peer-to-peer electronic cash.

This is why I totally switched to Ethereum. I’m like, “This is our best shot at building what Satoshi originally imagined.” It doesn’t stop at peer-to-peer electronic cash, either. If you remember the message in the Genesis Block about “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”—I’m butchering the quote right now—we can create a truly permissionless, decentralized financial system as well, and not just peer-to-peer electronic cash. We can take it even further than peer-to-peer electronic cash.

15. Principal risks to the $250k ETH thesis

Guys, as much as I love to discuss at length why Ethereum is going to win and ETH is going to $250,000, I do think we should give you some space to talk a little bit about the major key risks to consider that would stand in the way of this thesis playing out. I was looking through the report as you were talking and saw that you have a nice little section called “Frequently Asked Questions.” One of them was, “What are the principal risks to this thesis?” If you can just walk us through that.

Sure. I think the biggest one is technical risk. What comes hand in hand with innovation is changing stuff. To make Ethereum post-quantum and scale to the zkEVM, I’ve heard Justin Drake say that they have to replace 80% of the codebase, which is a little scary.

One thing I love about the Ethereum community is that it doesn’t sugarcoat these risks or pretend that they’re not there. It talks about them openly, and people communicate them. Fortunately, Ethereum has 4 clients, so if there’s a bug in one of them, it creates a certain level of antifragility and robustness for the protocol.

I think technical risk is probably the biggest one. Then there’s competitor risk as well, but it seems like Ethereum’s liquidity, developer, and brand network effects are going to be tough to replicate, especially as these institutions are already picking Ethereum as the place where they’re going to tokenize these assets and use it as the global settlement layer. I think those would be the 2 biggest ones. I’ll let Vivek add to that as well.

I was going to double-click on the second one, which is a lot of what Etherealize’s mission statement is: to educate the world about Ethereum and ETH and to help Ethereum win. We are assuming we’re doing a lot to make sure Ethereum can win.

One sort of dystopian future is that we end up in a world where we go back to corporate-intranet-style blockchains. That would hamper the network effects of Ethereum. If Ethereum is the backbone of the global financial system, then ETH becoming productive money and the biggest capital asset ever is, I think, inevitable.

We just have to see during this adoption wave if corporations embrace the public-internet version of Ethereum, which is what we’re seeing. I think it’s going to happen. The risk is that they just go back to the intranet playbook that we saw in 2017 and 2018. In that case, it won’t work and scale long-term. We’ll have to wait another cycle, and then we’ll get another shot at this. Again, we can be patient for a lot longer than the market.

I think the world is converging on public blockchains now. Look at where all the stablecoins are and where all the tokenized assets are. That’s the one risk I would point to.

Of all the risks, I used to be most concerned about regulators, and I think we’ve clearly moved past that. It’s taken a very long time. To Michael’s point, it’s really been just about a year that consensus has finally set in. Hopefully, there’s no going backward on that in the coming years.

16. What institutions still don’t understand about Ethereum

We have one last question for you. If institutional investors are listening, what’s the one thing about Ethereum and ETH that you believe they still do not fundamentally understand? What’s one thing you’d like them to better understand?

One very important point that we’ve gathered from our thousands of meetings and conversations at this point is that having Ethereum as the open, public, decentralized, neutral layer globally is the correct architecture, just like building a business on the internet is the correct architecture.

That being said, you can have as much security, compliance, privacy, and customization on top of that open layer by having things like L2s, ZK proofs, app-layer privacy, and app-layer permissioning. We need the foundation for the global financial system—and beyond, the place where AI agents transact, and decentralized social when that comes back—to be on an open layer with more accessibility. It can’t be a closed, centralized system.

That’s the most important part for everyone to understand, and they’re starting to. You can have your cake and eat it too with Ethereum. You can have your security and your permissioning at the app layer and the L2 layer. The base layer has to be permissionless.

I totally agree with what Vivek said there. I think it could get lost with all these cool use cases of stablecoins, tokenization, DeFi, and all these things you can do on-chain—what blockchains are for. I think it gets lost on people that the most important quality of a blockchain is its sovereignty. Can people change the protocol, and is it truly permissionless?

If you look at Ethereum, nobody’s even close to almost 1 million validators in terms of how decentralized it is and who controls it. To Vivek’s point, nobody’s going to want to build on somebody else’s chain. A user isn’t going to want to build on Stripe’s chain, or JPMorgan isn’t going to want to build on Goldman Sachs’s chain.

L2s are a great hybrid approach to that, where you get the customizability, control, and privacy you need with all the security guarantees of Ethereum. As Vivek likes to say, it’s the best business model in blockchain. You get to capture the sequencer fees, and you see Coinbase and Robinhood doing that.

You need the L2s to scale. You won’t be able to have the entire global financial system on just 1 blockchain. It’s far too big. Without sovereignty, you’re just looking at really slow databases, and there’s no real point to them if somebody controls the network and it’s not permissionless.

17. What’s Etherealize been working on?

Hey, guys, before we wrap up, you’ve been working on quite a bit in stealth. Anything you can tell us?

I wouldn’t call it stealth. I would just say that we want to and plan to deliver a lot of value and wins to Ethereum. We think the world’s assets should live on Ethereum. We’d rather show, not tell—not in the spirit of crypto, but in the spirit of, “Let’s build a business. Let’s show Ethereum’s actual value. Let’s show what we can do.”

That’ll be fodder for the next episode, and there’s plenty more to come.

18. Closing

Absolutely. I love that. Better to show than to tell. Well, guys, I think this is a great place for us to start to wrap up.

I want to remind our listeners that they can learn more about this new report by going to productivemoney.org. That should be live once our podcast here is published. You can go learn about Etherealize by going to etherealize.io. You should follow Etherealize_io on Twitter. Follow Vivek Ventures. That's Vivek's personal handle. Follow Mike's handle at MikeMCG0. And again, we'll put that all into the show notes. Guys, thank you so much for your time. Thank you for the important work you do at Etherealize, and thank you for communicating all of the value about Ethereum and ETH through these types of research reports and all the conversations you're having. We would love to have you back in the future, and I want to give you the final word before we go.

Thank you so much for having us. It's always a pleasure. You guys are such an important part of the ecosystem and community. Thanks for all the work you've done.

Thanks, everyone, for tuning in.