Hash Global Founder: Why I Also Chose to Liquidate All My ETH
- Core Thesis: If passed, the CLARITY Act will reduce regulatory uncertainty for Ethereum (ETH), which is a significant positive development. However, it is not a catalyst for unlocking a monetary premium; ETH’s valuation should revert to network infrastructure logic, rather than a simple analogy to gold or Bitcoin.
- Key Factors:
- The market currently evaluates ETH based on metrics like network revenue and DeFi activity, rather than a monetary premium narrative. Bitcoin, with its fixed supply and minimalist, non-sovereign narrative, is more easily perceived as "digital gold."
- Legal classification addresses the issue of institutional compliance allocation, whereas monetary premium relies on global consensus and historical credit. These two operate on different dimensions and cannot be directly equated.
- With the development of RWA and DeFi, tokenized assets like Treasury bonds and gold can also generate on-chain yields, which will weaken the narrative of ETH being the "only yield-bearing asset." The future competitive edge will lie in which asset is better suited as collateral.
- Institutional use of the Ethereum network (e.g., issuing tokenized funds, using stablecoins) does not necessarily require holding significant amounts of ETH. If the value capture mechanism is unclear, ETH’s value will struggle to be directly reflected through network usage.
- The true significance of the CLARITY Act is to fix ETH’s "regulatory discount," transforming it from a "regulatory risk asset" to an "asset on a network with clearer regulation." While important, this is far from unlocking a multi-trillion-dollar market cap revaluation.
Original Author: HashGlobal KK, Founder of Hash Global
Original Translation: Jiahuan, ChainCatcher
The author has fully exited all ETH positions. This article was published on May 24.
I recently read an article arguing that if the U.S. CLARITY Act passes, Ethereum will be the biggest winner.
Its core argument is that ETH could become the only asset within the U.S. regulatory framework that is both a "decentralized digital commodity" and a "programmable smart contract platform." Therefore, ETH's valuation framework should shift from a network revenue logic to a monetary premium logic, similar to BTC, gold, or even sovereign reserve assets.
I find this perspective insightful, but the conclusion may be somewhat overextended.
This is not to say I am bearish on ETH or denying the positive impact of CLARITY.
On the contrary, regulatory clarity is undoubtedly a major positive for ETH. It will reduce compliance concerns for institutional allocation of ETH and help further develop ETFs, custodial services, staking, institutional DeFi, RWA, and on-chain settlement businesses.
However, regulatory clarity does not equate to a monetary premium.
CLARITY may resolve the "regulatory discount" for ETH, but it will not automatically unlock valuation space associated with gold, real estate, or global reserve assets.
These are two entirely different matters and should be analyzed separately.
1. The Market Hasn't Bought This Logic Yet
If the market truly viewed ETH as "programmable gold" or an "interest-bearing monetary asset," its valuation should be closer to BTC's.
But that's not the case.
When evaluating ETH, the market still focuses on specific metrics:
- Ethereum mainnet revenue;
- DeFi activity;
- Whether stablecoins and RWAs settle primarily within the Ethereum ecosystem;
- Value flow from L2 to L1;
- ETH staking yield;
- Capital inflows into ETH ETFs;
- Competition from ecosystems like Solana, BNB Chain, and Base.
These are fundamentally the valuation logics for network assets, platform assets, and ecosystem assets.
BTC is different. It has no cash flow, no application ecosystem, and no need to discuss network revenue. Its logic is simple: a supply cap of 21 million, non-sovereign nature, censorship resistance, digital gold. People may disagree with this narrative, but it is simple, clear, and easy to disseminate.
ETH's narrative is far more complex. ETH serves as gas, staking asset, DeFi collateral, L2 settlement asset, and the underlying infrastructure for institutional on-chain finance. While multiple functions are an advantage, monetary premium typically requires a minimalist narrative.
Complexity benefits ecosystem development, but it does not necessarily help in forming a monetary premium like gold and BTC.
2. Legal Classification is Just an Entry Ticket
The original article makes a key leap: because ETH might be legally recognized as a decentralized digital commodity, it should enter the valuation framework of a top-tier monetary premium asset.
I find this logic problematic.
What legal classification addresses is: Can institutions hold it compliantly? Can they trade it compliantly? Can they custody it compliantly? Can they develop related products compliantly?
What the monetary premium addresses is: Is the global market willing to hold it as a long-term store of wealth?
These are two different questions.
Gold possesses a monetary premium, not because any single law classified it as such, but because thousands of years of historical consensus, physical scarcity, central bank reserve demand, and geopolitical safe-haven attributes have collectively built immense consensus.
BTC possesses a monetary premium, not because it can execute smart contracts, but because it is simple enough, pure enough, and resembles "digital gold" closely enough.
For ETH to gain a monetary premium, regulatory classification alone is insufficient. It must also prove that global capital is willing to hold ETH as a long-term store of value, not just as a critical on-chain financial infrastructure asset.
A significant gap still exists between these two states.
3. DeFi Will Undermine ETH's "Only Yield-Bearing" Narrative
The original article highlights one of ETH's advantages: ETH can generate yield through staking, while BTC and gold cannot.
While this holds true today, the situation may change in the coming years.
With the development of DeFi and RWA, many assets will be tokenized in the future. Gold, treasuries, money market funds, real estate funds, revenue rights, commodities, and stock ETFs can all enter the on-chain financial system as tokens.
Once these assets are on-chain, they will also gain new capabilities:
- They can be used as collateral;
- They can be lent and borrowed;
- They can be used for market making;
- They can be combined into structured yield products;
- They can integrate with DeFi protocols;
- They can form closed-loop on-chain capital flows with stablecoins.
Therefore, in the future, ETH will not be the only "yield-bearing" asset.
Tokenized gold integrated with DeFi can also generate on-chain yields. Tokenized treasuries and money market funds inherently have underlying yields. Tokenized real estate funds and other RWAs can also generate cash flows.
At that point, the question will no longer be "ETH can generate yield, gold cannot."
The real questions will become: Which is better collateral? Which has lower volatility? Whose yield source is clearer? Which has higher regulatory recognition? Which is more suitable for institutional balance sheets? Which is easier for global capital to hold long-term?
From this perspective, ETH may not hold an advantage over tokenized gold, tokenized treasuries, or tokenized money market funds.
ETH's staking yield comes from network security mechanisms, not traditional risk-free returns. It carries protocol risk, validator risk, slashing risk, liquid staking protocol risk, regulatory risk, and price volatility risk.
For institutions, ETH staking is certainly a valuable feature, but it should not be directly equated to "better than gold."
4. The Monetary Premium Belongs to BTC, Gold, and Tokenized Gold
I am more inclined to believe that, in the future, the monetary premium will primarily belong to BTC, gold, and potentially tokenized gold.
BTC's positioning is clear: digital gold.
Gold's positioning is also clear: the most important non-sovereign store of value in the traditional world.
If tokenized gold develops, the situation could become very compelling. It would inherit gold's historical credit while gaining on-chain liquidity, composability, and collateral capabilities. In this scenario, gold's monetary premium would not necessarily flow to ETH; instead, it could be further strengthened by tokenized gold.
This is not necessarily bad for ETH. These tokenized assets also need on-chain infrastructure and can be issued, traded, and collateralized on Ethereum or Ethereum L2s.
However, it implies that ETH is more of an infrastructure asset than a final monetary premium asset.
Infrastructure is certainly valuable. But infrastructure valuations typically revert to metrics like usage, revenue, network effects, and value capture, rather than directly analogizing to gold's total market cap, real estate's monetary premium, or the global reserve asset pool.
5. Ethereum's Value Capture Problem Remains Unsolved
The original article suggests CLARITY will widen the gap between ETH and other smart contract platforms, with other L1s entering a second tier of valuation while ETH remains in the first tier.
This judgment also requires caution.
The real world will not choose a blockchain solely based on U.S. regulatory classification.
Different countries, assets, and institutions will select underlying networks based on multiple factors:
- Cost;
- Performance;
- Compliance interfaces;
- KYC/AML requirements;
- Local regulatory attitudes;
- Ecosystem resources;
- Liquidity;
- Relationships with asset issuers and service providers;
- Whether a permissioned environment is needed.
Many RWA, stablecoin, and payment scenarios may not necessarily choose the Ethereum mainnet. They might opt for L2s, app chains, consortium chains, or other L1s that better suit local regulations and business needs.
More importantly, even if significant activity occurs within the Ethereum ecosystem, it does not guarantee that ETH will proportionally capture the value.
As we have seen in recent years, while L2s have expanded the Ethereum ecosystem, they also raise a question: once L2s scale, how much value truly flows back to ETH?
If a large volume of transactions occurs on L2s with declining fees, and the application layer and L2s themselves capture more user value, while the ETH mainnet only handles final settlement and security, then ETH's value capture capability remains to be proven.
One cannot assume that ETH's value will increase in tandem with the growth of the Ethereum ecosystem.
That is why I believe ETH's valuation must return to specific issues like network revenue, settlement demand, collateral demand, staking yield, and ecosystem value flow.
6. Using Ethereum ≠ Buying ETH
Another distinction needs to be made: institutions entering on-chain finance does not mean they will allocate ETH as a core asset.
Institutions might:
- Use the Ethereum network;
- Use Ethereum L2s;
- Issue tokenized funds;
- Use stablecoins for settlement;
- Use on-chain custody and compliant transfer tools;
- Use DeFi or permissioned DeFi;
- Access on-chain finance indirectly through service providers.
None of these require them to purchase large amounts of ETH.
Just as companies heavily using cloud services do not necessarily buy the stock of the cloud service provider, institutions using blockchain infrastructure do not necessarily need to hold the underlying token long-term.
For ETH to transition from a "network being used" to an "asset held long-term," it requires a clear value capture mechanism.
If such a mechanism remains unclear, the market will continue to evaluate ETH based on revenue, fees, staking yield, and ecosystem growth.
7. Grand Narratives Can No Longer Sustain Valuations
In the previous cycle, the market was willing to price in grand narratives.
"World computer," "internet of value," "global settlement layer," "cornerstone of decentralized finance" – these narratives were very powerful. Ethereum was undoubtedly the most important representative.
But the market has changed.
Investors are increasingly asking: Where is the revenue? Where are the users? Where is the value capture? Where is the real demand? Where is the regulatory pathway? Where is the closed-loop business logic?
As we have repeatedly emphasized in recent years, Web3 cannot just stay at the level of vision; it must ultimately return to fundamental values and basic business logic.
Can it generate revenue? Can it provide a better user experience? Can it create real economic value? If these questions cannot be answered, even the grandest narratives will struggle to sustain valuations over the long term.
This applies to ETH as well.
While it is certainly one of the most important Web3 infrastructures, to command a higher valuation, the market may need to see:
- Renewed growth in DeFi;
- Recovery of mainnet revenue;
- Clearer value flow from L2 to L1;
- Real settlement demand for stablecoins and RWAs within the Ethereum ecosystem;
- Continued growth in demand for ETH as collateral;
- Institutions not just using Ethereum, but actually needing to hold ETH.
None of these can be automatically achieved through a single piece of legislation.
8. The Real Meaning of CLARITY is to Fix the Regulatory Discount
Therefore, I am more inclined to view CLARITY's impact on ETH as reducing the regulatory discount, rather than unlocking trillions of dollars in monetary premium revaluation potential.
ETH has indeed faced regulatory uncertainty in the past. If U.S. regulators more clearly recognize ETH's commodity status, that would be a significant positive.
However, this would transform ETH from a "network asset with regulatory tail risk" into a "network asset with clearer regulation."
This is already significant in itself.
But it does not mean ETH will automatically become a substitute for gold, BTC, or global reserve assets.
If the market continues to evaluate ETH based on network revenue, staking yield, L2 value flow, DeFi activity, RWA settlement volume, and institutional usage, then ETH's valuation will remain constrained by fundamentals.
This is not necessarily a bad thing. Excellent infrastructure assets deserve high value. But they are not equivalent to monetary premium assets.
9. My Position on ETH
I still believe ETH is one of the most important assets in the digital asset industry.
Its long-term value stems from several sources: First, it is the most important open smart contract network.
Second, it is a key settlement layer for DeFi, stablecoins, RWAs, and on-chain finance.
Third, from a regulatory perspective, it is one of the most defensible decentralized infrastructures.
Fourth, it has accumulated long-term recognition from developers, applications, assets, and institutions.
