ETH is emerging as a macro reserve asset: scarce, yield-bearing, and deeply integrated with the next financial system.
In a new op-ed, @Etherealize_io co-founder @gphummer lays out why ETH is poised to be the neutral settlement layer as trillions in global assets move onchain.
Here’s the pitch.👇
ETH — the asset that powers and secures Ethereum — plays three roles in this new system:
➢ Digital oil (burned for every computation, transfer, or tokenized asset)
➢ Productive store-of-value (pays native yield via staking)
➢ Pristine collateral (non-sovereign, censorship-resistant, custodied by protocol)
Each role ties ETH to core economic functions. The more it’s used, the more it’s burned, locked, and accumulated.
With gross issuance capped at 1.51% and net issuance averaging just 0.1%/yr post-merge, while ~80% of fees are burned, ETH’s supply can trend toward zero or even negative. It tracks the upside of the digital economy while minimizing dilution.
Why ETH Is Structurally Different from BTC
BTC repriced first because its “digital gold” narrative is easy to grasp. ETH’s pitch — (fuel, collateral, ownership stake) — is more complex, but grounded in broader, more durable demand.
ETH combines reserve-like scarcity with the necessity of an industrial input. Its value scales with onchain economic throughput, not just perception.
ETH's Unique Monetary Design
Ethereum validators run on minimal overhead, requiring far less issuance to stay profitable. With the fee burn in place, ETH’s supply curve resembles compressed oil production: rising usage, flat output.
Why ETH Has Lagged BTC — and Why That Won’t Last
ETH’s slower repricing reflects complexity, not weakness:
➢ BTC = simple narrative (“digital gold”); ETH = multi-role asset
➢ Ethereum shifted activity to Layer 2s, lowering Layer 1 revenue and muddling models
➢ U.S. regulatory ambiguity deterred institutions
➢ Widespread ETH use as collateral led to auto-liquidations during deleveraging
Those headwinds are fading. Fee burns are steady, staking rewards are stable, and ETH/BTC is near 2018 lows, even as Ethereum secures 10× more value today.
Catalysts in Motion
➢ Layer 2 explosion — @base, @zksync, Superchain rollups scale to 1,000s of TPS. Interop advances enable seamless Layer 2-to-Layer 2 execution.
➢ Tech breakthroughs — Real-time proving, account abstraction, and Layer 1 scaling unlock new capabilities daily.
➢ Regulatory clarity — ETH confirmed as commodity. Spot ETFs launched. EU and Singapore legalized staking.
➢ Institutional tokenization — BlackRock, Franklin Templeton, UBS, and Sony all settling assets on Ethereum or anchored Layer 2s.
➢ Strategic ETH reserves — DAOs, protocols, and firms (e.g. Coinbase, Deutsche Bank) are stockpiling staked ETH.
ETH is evolving from tech speculation to macro reserve.
Valuing ETH: Beyond DCF
ETH can’t be valued like equity; it burns fees instead of distributing them. ETH is a hybrid commodity-reserve: consumed, staked, transacted, stockpiled.
ETH’s fully diluted market cap could plausibly mirror traditional reserve assets if Ethereum underpins even 10% of global financial flows.
The AI Multiplier
AI will demand a machine-native financial system: programmable, borderless, final. Ethereum is already there.
➢ Atomic composability — Agents can act in a single transaction.
➢ Code-enforced rights — No courts, no intermediaries.
➢ Permissionless liquidity — Agents can hold treasuries, stablecoins, RWAs.
If AI agents come to manage trillions, ETH is the only Layer 1 that scales with them. Each action burns ETH or settles back to Layer 1.
Roadmap Signals
Every upgrade boosts ETH’s economic surface area while keeping supply capped. The result: demand scales, supply doesn’t.
Quantifying the Opportunity
If Ethereum captures 10% of a $500T global asset base and ~30bps of annualized fees are burned, ETH enters a negative net issuance regime: supply-constrained, demand-driven, and self-reinforcing over decades.
At $89T in reserve value, ETH = ~$740k. Even hitting just gold’s $22T implies ~$185k/ETH, 66× from mid-2025 levels near $2.8k. Plus a 3% native yield while you wait.
Investment Takeaways
➢ ETH trades at alter ETH’s supply mechanics, they just shift the timeline.
Conclusion
Ethereum is the settlement layer for the internet of value. ETH isn’t just “gas” — it’s scarce, yield-bearing, non-sovereign commodity money that regulates the system itself.
As tokenized assets, AI agents, and treasuries converge on Ethereum, ETH becomes reflexively scarce: usage burns it, conviction rises, supply locks, scarcity deepens.
In the low case, ETH re-rates to match current utility. In the base case, it gains a gold-like premium. In the high-conviction case, it becomes the reserve asset of a financial system bigger than many nations.
The question is no longer “Why own ETH?” but:
“How underexposed am I to the reserve asset of the next financial system?”