Hash Global Founder: Why I Also Chose to Liquidate All My ETH Holdings
- Core Thesis: If passed, the CLARITY Act will reduce regulatory uncertainty for Ethereum (ETH), which is a significant positive catalyst, but it is not the catalyst to unlock a monetary premium; ETH's valuation should return to a network infrastructure logic, rather than a simple analogy to gold or Bitcoin.
- Key Elements:
- The market currently still evaluates ETH based on metrics like network revenue and DeFi activity, rather than the narrative of a monetary premium; Bitcoin, with its fixed supply and simple, non-sovereign narrative, is more easily perceived as "digital gold."
- Legal classification addresses the issue of institutional compliance allocation, whereas a monetary premium relies on global consensus and historical credibility. These are different dimensions and cannot be directly equated.
- With the development of RWA and DeFi, tokenized treasury bonds, gold, and other assets can also generate on-chain yields, which will weaken the narrative of ETH being the "only yield-bearing asset." The future point of competition will lie in which asset is better suited as collateral.
- Institutions utilizing the Ethereum network (e.g., issuing tokenized funds, using stablecoins) do not necessarily require holding large amounts of ETH; if the value capture mechanism is unclear, it will be difficult for ETH's value to be directly reflected from network usage.
- The true significance of the CLARITY Act lies in repairing ETH's "regulatory discount," transforming it from a "regulatory risk asset" into a "network asset with clearer regulation." While important, this is far from unlocking a valuation re-rating worth trillions of dollars.
Original Author: HashGlobal KK Hash Global Founder
Original Compiled by: Jiahuan, ChainCatcher
The author has completely liquidated all ETH holdings. This article was published on May 24th.
Recently, I read an article arguing that if the US CLARITY Act passes, Ethereum would be the biggest winner.
Its core thesis is that ETH could become the only asset under the US regulatory framework that possesses both the attributes of 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 viewpoint insightful, but the conclusion may be somewhat overextended.
This is not to say I am bearish on ETH or deny the positive impact of CLARITY.
On the contrary, regulatory clarity is undoubtedly a significant positive for ETH. It will reduce compliance concerns for institutional allocation of ETH and help further develop businesses around ETFs, custody services, staking, institutional DeFi, RWA, and on-chain settlement.
However, regulatory clarity does not equal a monetary premium.
CLARITY might resolve the "regulatory discount" for ETH, but it won't automatically unlock the valuation space associated with gold, real estate, or global reserve assets.
These are two distinctly different things and should be analyzed separately.
1. The Market Hasn't Bought This Narrative Yet
If ETH were truly perceived by the market as "programmable gold" or an "interest-bearing monetary asset," its valuation should be closer to BTC.
But that is not the case.
When evaluating ETH, the market still focuses on specific metrics:
- Ethereum mainnet revenue;
- DeFi activity;
- Whether stablecoins and RWAs are primarily settled 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: 21 million supply cap, non-sovereign, censorship-resistant, digital gold. People may disagree with this narrative, but it is simple, clear, and easy to communicate.
ETH's narrative is far more complex. ETH serves as gas, staking asset, DeFi collateral, L2 settlement asset, and infrastructure for institutional on-chain finance. While multiple functions are an advantage, monetary premiums typically require extremely simple narratives.
Complexity benefits ecosystem development but doesn't necessarily help form the kind of monetary premium seen with gold and BTC.
2. Legal Classification is Just an Entry Ticket
The original article makes a critical leap: because ETH might be legally recognized as a decentralized digital commodity, it should enter the valuation framework of first-tier monetary premium assets.
I find this reasoning problematic.
The problem that legal classification solves is: Can institutions hold it compliantly? Can they trade it compliantly? Can they custody it compliantly? Can they develop related products compliantly?
The problem that monetary premium solves is: Is the global market willing to hold it as a long-term store of wealth?
These are two different questions.
Gold has a monetary premium, not because any single law classifies it as such, but because thousands of years of historical consensus, physical scarcity, central bank reserve demand, and geopolitical safe-haven attributes have formed a massive consensus.
BTC has a monetary premium, not because it can execute smart contracts, but because it is simple enough, pure enough, and digital gold-like enough.
For ETH to gain a monetary premium, regulatory classification alone is insufficient. It must also demonstrate that global capital is willing to hold ETH as a long-term store of value, not just as a crucial on-chain financial infrastructure asset.
There remains a significant gap between these two states.
3. DeFi Will Weaken 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 too will 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 be integrated with DeFi protocols;
- They can form a closed-loop on-chain capital flow 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 yield. 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 acceptance? Which is more suitable for institutional balance sheets? Which is more easily held long-term by global capital?
From this perspective, ETH may not have 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 being "superior to gold."
4. Monetary Premium Belongs to BTC, Gold, and Tokenized Gold
I am more inclined to believe that the monetary premium of the future 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 be 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 wouldn't necessarily flow to ETH; instead, it could be further strengthened by tokenized gold.
This isn't 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 rather than the ultimate monetary premium asset.
Infrastructure is certainly valuable. But the valuation of infrastructure usually reverts to usage metrics, 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 argues that CLARITY will widen the gap between ETH and other smart contract platforms, with other L1s potentially falling into a second-tier valuation while ETH remains in the first tier.
This judgment also needs careful consideration.
The real world will not choose a blockchain solely based on US regulatory classifications.
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;
- The need for a permissioned environment.
Many RWA, stablecoin, and payment scenarios may not choose Ethereum mainnet. They might opt for L2s, app chains, consortium chains, or other L1s that better align with local regulations and business needs.
More importantly, even if a large amount of activity occurs within the Ethereum ecosystem, it does not guarantee that ETH will capture value proportionally.
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 actually flows back to ETH?
If a significant 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 ability remains to be proven.
One cannot assume that Ethereum ecosystem growth automatically translates into ETH value appreciation.
This is why I believe ETH's valuation must revert to specific fundamentals like network revenue, settlement demand, collateral demand, staking yield, and ecosystem value flow.
6. Using Ethereum ≠ Buying ETH
A distinction also needs to be made: institutions entering on-chain finance does not mean they will allocate to 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 buy large amounts of ETH.
Just as companies that heavily use cloud services don't necessarily buy the stock of the cloud company, institutions using blockchain infrastructure don't necessarily need to hold the underlying token long-term.
For ETH to transition from a "network that is used" to an "asset that is held long-term," a clear value capture mechanism is required.
If this mechanism remains unclear, the market will continue to value ETH based on revenue, fees, staking yield, and ecosystem growth.
7. Grand Narratives Can No Longer Sustain Valuations
In the last cycle, the market was willing to assign valuations based on grand narratives.
"World Computer," "Internet of Value," "Global Settlement Layer," "Bedrock of Decentralized Finance"—these narratives were very powerful. Ethereum is undoubtedly the most important representative of this.
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 live on visions; it must ultimately return to fundamental value and basic business logic.
Can it make money? 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 in the long run.
The same applies to ETH.
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 in 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 tangibly needing to hold ETH.
None of this can be achieved automatically by a single piece of legislation.
8. CLARITY's True Significance is Fixing 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 US regulators more clearly recognize ETH's commodity attribute, that would be a significant positive.
However, this would transform ETH from a "network asset with regulatory tail risk" to a "network asset with clearer regulation."
That is already significant.
But it does not mean ETH automatically becomes a substitute for gold, BTC, or global reserve assets.
If the market continues to value 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 its fundamentals.
This is not necessarily a bad thing. Good infrastructure assets deserve high value. But they are not equivalent to monetary premium assets.
9. My Stance 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.
