Legendary cyberpunks Nick Szabo and Ryan Watkins, co-founders of Syncracy Capital, have laid out a contrarian framework for understanding Ethereum's rally and valuation mechanisms in a pair of posts, together with point counters on what really drives Layer-1 prices. It read like a point.
Ethereum price has nothing to do with utility
Szabo’s core argument is that “the fundamental problem with ETH valuation is that Ethereum’s primary use cases are largely external to ETH’s market value.” In his view, Ethereum “could be very useful” and applications “could yield huge returns,” but “ETH is still either cheap or there is very little in between.”
He contrasts this with Bitcoin: “The primary use case is as a store of value and is closely tied to price. For Szabo, Crux is structural: Ethereum’s utility does not reliably translate into value capture by ETH, whereas Bitcoin’s purpose and price are intertwined by design.
The statement from Szabo, who returned to the X after a five-year absence in late September 2025, was made in response to Watkins' A. Researchers come at the market from the opposite angle, arguing that investors routinely over-engineer layer-1 valuation models and prices and narratives do the heavy lifting. “Time and I have seen people overthink L1 evaluation,” he said, framing the final leg of ETH’s strength as a narrative pivot rather than a spreadsheet breakthrough.
Why has ETH price tripled since April?
“The only difference between $1400 ETH and $5000 ETH was Bitmine.” “Ethereum was a dying platform,” he said in April. Today, “This is the Stablecoin chain and the next ‘Bitcoin-like’ opportunity for institutions.” The lesson he draws is a blunt one: “Price leads the story,” he says.
Crucially, Watkins does not claim to justify these stories. He is emphasizing the vacuum they fill. “The point here is not about which of these are justified. The point is that the absence of an agreed-upon evaluation methodology creates a space that only stories and relative frameworks can fill.”
He floats the competing bull case not as a conviction but as an open hypothesis: “What about the Eth Bull case becoming a rate of global GDP? What about it becoming an essentially unassessable ‘programmable Bitcoin’?
That uncertainty pushes the market towards simple comparisons and locking in the flow. “So what happens when the market instead of relative value and the story goes to $2 trillion? So shouldn't it be 50% of ETH? Shouldn't that be affordable for Bitcoin? Shouldn't it be almost all economical? Metrics.”
He dismisses these as “goofy” exercises, but they are useful for navigation: “We can theorize all we want or navigate the environment before us.” “Don’t overthink it” until the fundamentals have been reaffirmed. In his closing line, he clearly defines Edge: “There is an enormous amount of competitive advantage to assets that have penetrated the mainstream consciousness and persisted over time. It is a game of flow and story until the party stops.”
Both views can be true at once. The market may continue to maintain ethical prices primarily through narrative and relative value, but it remains unanswered whether Ethereum's design can hardwire a durable link between network utility and token value. Now the debate itself is a signal. ETH is moving through a cycle where awareness of purpose as well as measurable cash flow analogs set the tone.
At press time, ETH was trading at $4,701.92.
Featured image created by Dall.e, chart from TradingView.com
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