Did I Mistake an Ethereum Thesis for a Crypto Thesis?
I’ve been sitting on a crypto position for about nine months now, and it hasn’t worked. Not enough to make me panic, not enough to materially change my portfolio, but long enough that I’ve started asking myself an uncomfortable question.
Not whether the thesis is wrong. Whether I ever actually understood how the thesis was supposed to make me money.
The strange thing is my conviction in the original macro story is probably higher today than when I first invested, yet my conviction in the investments themselves is lower.
That feels backwards.
How I got here
This didn’t start as a crypto idea. It started with US debt.
The more I looked at America’s fiscal trajectory, the more uncomfortable I became with the long-term picture. Debt keeps growing, deficits keep widening, interest expense keeps rising, and at some point somebody has to fund all of that. That led me down a rabbit hole, first de-dollarisation, then sanctions, then reserve diversification, then stablecoins. By 2025, stablecoin legislation was making real progress through Congress, and that’s the point where the theory became investable for me. The House passing its version, the Senate advancing its own version, none of that meant the bill was guaranteed to become law, but it told me this wasn’t just a crypto-industry wishlist anymore. Whether the legislation ultimately passes or not, Washington is clearly taking stablecoins seriously as part of the future financial system.
For the first time I could see a plausible path where stablecoins weren’t trying to replace the dollar. They were trying to extend it. If stablecoins get widely adopted, somebody has to hold the reserves backing them, and those reserves are likely to sit in short-term Treasuries and cash equivalents, which means stablecoins could become a new source of demand for dollars and US government debt.
That was the macro thesis. And it still largely is.
Why I chose Ethereum
Looking back, I realise I wasn’t really buying a crypto thesis. I was buying an Ethereum thesis, and I didn’t fully clock that at the time.
ETH and BMNR make up a noticeably larger slice of my crypto exposure than BTC does. So most of my actual crypto exposure depends on Ethereum specifically working out, not crypto broadly.
My reasoning at the time felt straightforward enough. Bitcoin was digital gold. Ethereum was digital gold plus everything else, a settlement layer, a smart contract platform, the foundation underneath stablecoins and tokenized assets and institutional finance. If both succeeded, it seemed logical that Ethereum would capture more value. Why own the digital gold when you could own the gold and the infrastructure sitting underneath it too.
That was the bet.
The assumption I didn’t realise I was making
What I’ve started questioning isn’t whether stablecoins happen. It’s whether Ethereum necessarily captures the value if they do, and the more I think about it, the more I realise I may have confused network usage with investor returns. Those aren’t the same thing.
Say my original thesis plays out exactly as I imagined, stablecoins go mainstream, digital dollars become common, tokenized stocks and bonds become part of everyday finance. Who wins? Nine months ago I’d have answered Ethereum without much hesitation. Today I’m not so sure. The Treasury market could win. Banks could win. Payment networks, stablecoin issuers, exchanges, all plausible winners. Ethereum might win too.
But “might” is doing a lot of work in that sentence.
The stablecoin realisation
This was the part I understood least when I first invested. I assumed that if stablecoins became successful, the economics would naturally flow back to Ethereum. What I didn’t fully appreciate is that the economics may accrue elsewhere entirely.
Take a stablecoin issuer. A user deposits dollars, the issuer buys Treasury bills, the user gets a digital dollar, and the issuer earns the Treasury yield sitting in between. The user isn’t necessarily buying crypto exposure. They’re buying convenience, faster settlement, cross-border transfers and payments that work around the clock. The economic value in that chain may sit with the issuer holding the reserves, not with the blockchain quietly running underneath it.
That realisation led me to another question. Why am I assuming crypto-native firms become the primary winners? Take Singapore. Would MAS really want a private company managing SGD circulation? Probably not. I’d expect MAS to want licensed banks operating within a framework it controls, the way it’s always preferred to keep its hands on the levers.
If that’s roughly how this plays out, the future financial system may look less like crypto replacing banks and more like banks adopting crypto infrastructure underneath products that still carry a bank’s name. And if that’s the shape it takes, the biggest winners might not be the blockchains themselves. They might simply be the institutions sitting closest to the customer.
That possibility doesn’t break my macro thesis. But it absolutely complicates the investment thesis I built on top of it.
What about Ethereum’s yield?
One reason I originally preferred ETH over BTC was staking. Bitcoin is primarily a store-of-value asset. Ethereum, at least in theory, has an economic model, activity on the network generates fees, some of which are burned and some of which flow to validators and stakers. That creates a direct link between network usage and investor returns.
The question, of course, is whether enough of that future activity actually lands on Ethereum.
The best counterargument
To be fair, there are people much smarter than me who’d say I’ve gotten too pessimistic, and their case isn’t just theoretical anymore, it’s already showing up in who’s actually building on Ethereum.
Fidelity launched its own stablecoin on Ethereum earlier this year, choosing to build on public rails rather than a closed internal system. To me, that’s one of the strongest institutional endorsements of Ethereum’s role in digital finance. Investors such as Tom Lee and research teams at major banks make a similar argument: if stablecoins, tokenized assets and on-chain settlement continue growing, Ethereum could become part of the financial plumbing itself rather than just another speculative asset.
Viewed this way, Ethereum isn’t really competing with Bitcoin at all. Bitcoin’s job is being a store of value. Ethereum is trying to become the settlement layer for stablecoins, tokenized assets, decentralized finance, and potentially even machine-to-machine transactions in an AI-driven world. If that future arrives, today’s valuation may look low in hindsight.
The catch is that this thesis needs more than stablecoin adoption in general. It needs Ethereum specifically to remain the place where that activity happens, and to capture enough of the economics for ETH holders to actually benefit.
That’s the part I haven’t fully convinced myself about yet. But I think it’s worth saying plainly that there’s a coherent investment thesis here, even while I’m questioning parts of it.
What I haven’t figured out
My conviction in the original macro thesis is, if anything, higher today than when I first invested. America’s debt problem hasn’t improved. The stablecoin discussion has become more serious. The policy direction is becoming clearer. I also still struggle to see a credible alternative to the dollar. The yuan gets presented as the obvious challenger, but reserve currencies need openness, and China still maintains meaningful capital controls and a tight grip on capital flows. That’s not necessarily the wrong choice from China’s perspective, but it does make global reserve-currency status a lot harder to reach.
For that reason, I increasingly think the real competition isn’t between a dollar world and a yuan world. It’s between different ways the dollar stays dominant. Stablecoins may be one of those ways.
What I’m a lot less certain about is whether ETH and BMNR are actually the right vehicles to express that view.
Where I land
The reason I haven’t sold is simple. I can still see a credible path where the Ethereum bulls are right. If stablecoins continue growing, if tokenized assets become mainstream, and if Ethereum remains the dominant settlement layer, then today’s concerns about value capture may look overly cautious in hindsight.
What I’m questioning isn’t the possibility of that outcome. I’m questioning the probability.
I’m also aware this isn’t the first time I’ve written a post that ends with “I’m still thinking about it.” At some point patience becomes conviction. At some point it becomes inertia. I’m not yet sure which side of that line I’m on.
The more I think about it, the more I realise this isn’t really a crypto problem. Every thematic investment eventually runs into the same question, being right about the trend doesn’t guarantee you’re holding the asset that benefits most from it.
That’s the question I keep coming back to. Not whether the future arrives. But who gets paid when it does.
It is not financial advice. The author may hold positions in securities discussed. Readers should conduct their own due diligence and consult with a qualified financial advisor before making investment decisions.