Former Bankless contributor Lucas: Why I’m still bullish on Ethereum

Original Author: Lucas, former Bankless member

Original Translation: Saoirse, Foresight News

Core Summary:

• All assets will eventually be tokenized;
• Ethereum becomes the settlement layer for all types of tokenized assets;
• ETH secures the network through staking, capturing the full value generated by settlement activities;
• The global financial system is transitioning towards asset tokenization;
• Leveraging its security, stability, and long-established ecosystem moat, Ethereum will capture a significant share of the tokenization market.

The Prevailing "Ethereum is Dead" Narrative

Currently, market sentiment towards Ethereum on crypto social platforms has hit an all-time low. Many peers I have worked with for years are gradually leaving the Ethereum ecosystem, some have even exited the crypto industry entirely, and most no longer hold ETH, primarily because they no longer believe in its investment value. This isn't directed at any specific individual or group, but rather a common phenomenon I've witnessed firsthand within the industry.

The massive exodus of capital stems partly from the fact that cryptocurrency is no longer a cutting-edge hot technology, with artificial intelligence, robotics, and life extension research becoming the new darlings of capital; however, the poor returns from ETH's price weakness are the key driver of bearish sentiment. To put it bluntly, holding ETH over the past few years has been a terrible experience.

Yet, I remain firmly bullish on Ethereum and ETH, more confident than ever before, and I suggest readers share this bullish outlook. In fact, Ethereum is entering the most anticipated adoption and growth cycle in its history.

Addressing the Poor Price Performance

Let's first confront the most obvious issue: over the past nearly five years, ETH's price performance has been quite poor. Investors who entered in 2021 are at best breaking even, while most are deeply underwater. Even after the recent market correction, Bitcoin's current price has firmly held above its 2021 bull market high, and its 2025 peak was double that high. In contrast, ETH's current price is about 60% below its previous all-time high, failing to set a new record in 2025 and unable to breach the $5,000 mark.

During the same period, the S&P 500 index has been hitting all-time highs almost daily, and hot sectors like AI, semiconductors, and energy on Wall Street have seen stocks surge across the board, making ETH's performance look even worse by comparison.

However, the good news is that over a longer timeframe, ETH's chart has merely been trapped in a multi-year range consolidation. With a current market cap exceeding $200 billion, ETH has consistently held the $2,000 support level, firmly ranking among the top 100 global assets by market cap. Looking at the laws of capital market development, it's common for high-quality growth assets to experience years of sideways grinding before embarking on a long-term bull run.

Ignore the percentage change values; this is primarily to measure the duration the price remained within this range.

Global giants like Amazon, Nvidia, Apple, and Microsoft have all gone through the same journey:

• Amazon: Bezos led the company through a nearly decade-long sideways consolidation in the 2000s after the dot-com bubble burst, weathering the industry winter to become a top global company.

• Nvidia: Experienced a seven-year prolonged consolidation in the 2010s before riding the AI wave to an epic surge in stock price, entering the top tier by global market cap.

• Apple: Experienced long-term uncertainty and consolidation during the 1980s and 1990s, only taking off after Jobs returned in 1997.

• Microsoft: Its stock price consolidated for about 15 years after 2000. Investors who entered in 2000 only broke even by 2015, yet it is now the world's second most valuable company.

It's easy to see the pattern: Most top-tier global assets undergo long, tedious periods of consolidation. Some spike briefly to new highs before pulling back, waiting for industry catalysts to trigger the next bull run. Moreover, during these consolidation phases for these companies, the broader U.S. stock market was often hitting new highs. Within this logic, ETH's weak performance over the past five years is not abnormal in financial history.

Setting aside price, Ethereum's current fundamentals are arguably in the best shape in its history.

On-Chain Ecosystem Data Continues to Improve

According to bearish market narratives, a weak price should be accompanied by declining on-chain activity: lower transaction volumes, high fees, and stagnant applications. But the actual data tells a completely different story. Ethereum's on-chain transaction volume is steadily climbing, fees are at multi-year lows, and the pace of asset tokenization is accelerating.

Data Source: Etherscan

Based on Etherscan data: In May 2026, the average daily number of transactions on Ethereum reached 2.27 million, an all-time high. During the same period, the average transaction fee was only $0.27, a significant drop compared to the $50-$100 gas fees common during the 2021 bull market, achieved while transaction volume doubled.

The total number of on-chain addresses has surpassed 400 million. In 2026, the average daily address growth rate is approximately 0.08%, and the number of daily active users has consistently exceeded 1 million in recent months. At the current growth rate, barring any major industry catalyst, Ethereum's total address count could surpass 1 billion by mid-2029.

Staking is also setting new records: Over 32% of the total ETH supply is staked, continuously providing security for the network.

Data Source: validatorqueue.com

In summary, Ethereum has achieved scaling upgrades while maintaining decentralization and security. It has not experienced a full network outage in over a decade since its launch. By providing extremely neutral, secure, and programmable block space, it has secured the core chips needed to compete as a global financial infrastructure, which is a prerequisite for onboarding the massive wave of traditional asset tokenization.

Becoming the Underlying Infrastructure of the Global Financial System

Since entering the industry in 2017, my long-term thesis for Ethereum has remained unchanged:

• All valuable assets in the world will eventually be tokenized;
• Ethereum becomes the unified settlement layer for all categories of tokenized assets;
• ETH captures the value increment generated by all activities on the settlement layer.

In its first decade, Ethereum primarily served as a testing ground for crypto-native assets. DeFi, NFTs, memecoins, and other sectors were born and developed here, solidifying the underlying ecosystem foundation. In its next development phase, Ethereum will embark on a new journey towards trillion-dollar market capitalization.

For veteran crypto-native players, traditional finance coming on-chain might seem dull, but it is an indispensable step for blockchain to go mainstream and deserves the industry's full support. In the future, the vast majority of the $700 trillion in global traditional real-world assets will eventually be tokenized on-chain, and Ethereum will become the preferred network.

Many argue that Ethereum's scalability is insufficient to handle such massive assets or that other L1s will eat its lunch. However, current data refutes this view: traditional financial institutions are adopting the Ethereum ecosystem en masse.

A series of news headlines from the past two years. Notice they have something in common.

The core demand for institutions entering this space is certainty: For banks, asset managers, and clearinghouses, choosing a blockchain to custody trillion-dollar assets is a major strategic decision. They must capture the tokenization dividend while avoiding career risk from making the wrong choice.

Of course, other L1s like Hyperliquid and Solana can also capture a share. The tokenization track is large enough to accommodate multiple L1s developing together; no single chain can monopolize it. However, traditional institutions seeking stability will prioritize Ethereum when deploying RWA.

Data supports this view: Stablecoins are the first tokenized real-world asset to achieve product-market fit, with a circulating market cap exceeding $300 billion. Tom Lee described stablecoins as the "ChatGPT moment" for crypto, with Ethereum holding a 54% market share of the total stablecoin market cap.

Data Source: rwa.xyz

As of June 1, 2026, the total on-chain value of all categories of tokenized real-world assets (RWA) has exceeded $30 billion, with the track's growth curve steeply rising. Over 53% of these RWA assets are deployed on the Ethereum chain. Even as other L1s start from scratch to compete for non-stablecoin RWA share, Ethereum firmly maintains its dominant position.

Data Source: rwa.xyz

The current development stage of the RWA track mirrors the nascent DeFi period of 2019-2020: a clear new track thesis with steadily rising early data. Looking back at DefiLlama data, DeFi's total value locked saw exponential growth in the first half of 2020, while ETH's price was stuck in a long-term consolidation.

When the DeFi bull run fully exploded and yield farming went viral, ETH's market cap, weighed down by the COVID crash, was only $20-$25 billion, ten times less than its current ~$230 billion market cap. Around the same time, the newly launched BNB Chain once threatened Ethereum's position with low fees. It wasn't until the total value of DeFi assets reached about 20% of Ethereum's market cap that ETH started its rally from $300, surging to $4,000 by year-end, producing a super bull run.

For the current comparison: Excluding stablecoins, the total scale of non-stablecoin RWA on Ethereum is about $16 billion, only 7% of ETH's total market cap. This places it at a stage similar to the early DeFi era, but with ten times the scale: DeFi started with a TVL of $3 billion, RWA now starts with $30 billion; ETH's bottom in the early days was $200, now it's $2,000; the early competitor was BNB Chain, now it's Hyperliquid.

Additional note: In the early DeFi days, collateral demand generated significant ETH buying pressure, and NFTs further strengthened the "ETH equals digital gold" narrative. However, at that time, Ethereum had not yet implemented PoS staking and the EIP-1559 burn mechanism. Both rules are now in effect, meaning every on-chain transaction directly contributes to ETH's deflationary pressure and value support.

Extrapolating from the tenfold scale increase, the total RWA market (excluding stablecoins) in this cycle could potentially break $1 trillion. The U.S. CLARITY Act could be a key catalyst. According to Polymarket data, the probability of the bill being signed into law in 2026 is about 55%. Its passage would unlock a compliant on-ramp for U.S. financial assets on-chain, serving as a massive positive catalyst for Ethereum.

Ethereum's Vitality Remains Strong

Stocks, bonds, commodities, real estate, art, intellectual property – any asset of value will eventually become tokenized. This is the next major innovation in global finance.

The first two decades of the crypto industry focused on the issuance and innovation of crypto-native assets. The next two decades will shift the industry's focus towards onboarding traditional real-world assets onto the chain.

Even though the current crypto social media sphere is predominantly bearish on Ethereum, I remain convinced: Ethereum will become the foundational layer for the vast majority of tokenized assets. Relying on years of accumulated security, reliability, and liquidity moats, Ethereum's advantages cannot be replicated overnight. Once a massive amount of global assets is settled on Ethereum, the market will inevitably reprice ETH, replicating the valuation surge cycles of the past.