Key Takeaways:
An Ethereum ICO-era developer publicly pinned ether's 65% decline against Bitcoin since the Merge on specific product failures at the Ethereum Foundation, naming missed calls on staking, rollup economics, and marketing strategy.
The ETH/BTC ratio has fallen from 0.085 near the Merge in September 2022 to roughly 0.028 by late May, a 65% slide that an insider attributes to execution failures at the Ethereum Foundation rather than broad market cycles or coordination problems.
"We don't pick winners is what an organization says when it does not want to compete," Reid, an ICO-era participant who still builds on Ethereum and covers credit and real-world assets at Figure and Securitize, said. He disclosed he remains long ether.
The Merge's 99.95% energy-reduction message answered questions capital allocators never asked, Reid argued. Institutions wanted yield, developers wanted finality, and users wanted cheaper transactions. Solana launched mainnet beta in March 2020 and shipped wallets, decentralized exchanges, and money markets while Ethereum debated specs. The smoking gun, in his view, is the absence of a first-party staking app three years after the Merge. The official path still requires running a validator with at least 32 ETH, pushing most users to Lido, which holds about 24% of staked ETH despite repeated centralization warnings from developers.
The rollup-centric roadmap drained the base layer. EIP-4844 went live in March 2024 and pushed blob fees near 1 wei through most of 2024 and 2025. Ethereum's quarterly transaction fee revenue has fallen roughly 95% from a Q4 2021 peak of $4.3 billion. Arbitrum has marketed 90% to 98% operating margins on its L2s, while Base captured close to 70% of rollup profits by mid-2025. Every major L2 issued its own token, fragmenting capital flows inside the ecosystem. Reid contrasts this with Solana's integrated L1, where fee capture accrues directly to its native token.
A 65% Drop With Names Attached
Reid rejects Bankless co-founder David Hoffman's framing of ether's "deserved cap" as a noble ceiling. He argues the cap sits lower than bulls expected for reasons with names and dates rather than coordination theory. Vitalik Buterin's writing through 2024 and 2025 shifted from Casper specs toward pluralism and network states — a tone Reid reads as an established Ethereum cultural posture rather than an active competitive one.
Can the Foundation Change Course?
The remaining question is whether Foundation product cadence shifts. The ETH/BTC ratio's path through the rest of the cycle will reflect the answer. Ether currently trades below $2,000, down 21% over the past year, as capital continues rotating toward Bitcoin and competing L1s that offer integrated fee capture and faster execution.
This article is for informational purposes only and does not constitute investment advice.
