Former Bankless Member 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 in the future;
• Ethereum becomes the settlement layer for all types of tokenized assets;
• ETH is used for network security staking, capturing the full value generated from settlement activities;
• The global financial system as a whole is transitioning towards asset tokenization;
• Relying on its security, stability, and long-accumulated ecosystem moats, Ethereum will capture a significant market share in the tokenization track.

The "Ethereum is Dead" Narrative Prevails

Currently, in crypto social media circles, market pessimism towards Ethereum has hit an all-time low. Many peers I've worked with for years have gradually exited the Ethereum track, some have even left the crypto industry entirely, and the vast majority no longer hold ETH, primarily because they no longer recognize its investment value. This is not targeting any specific individual or circle, but the general situation I've personally witnessed within the industry.

The large-scale exodus of capital is partly because cryptocurrency is no longer the cutting-edge hot technology; AI, robotics, and life extension research have become the darlings of capital instead. However, the poor returns from ETH's weak price performance are the key trigger for market bearishness. To put it bluntly, holding ETH over the past few years has been a terrible experience.

But I remain firmly bullish on Ethereum and ETH, with even more confidence than at any previous stage, and I suggest readers be bullish too. In fact, Ethereum is ushering in the most anticipated cycle of adoption and growth in its own development history.

A Word on the Terrible Price Performance

Let's first address the most obvious issue: Over the past nearly five years, ETH's price performance has been quite poor. Investors who entered and held positions in 2021 were at best breaking even, with most deeply underwater. Even with the recent market correction, Bitcoin's current price still firmly holds the peak of the 2021 bull run, and its 2025 high even doubled that peak. In contrast, ETH's current price is down about 60% from its previous all-time high, failing to set a new record in 2025 and unable to even breach the $5,000 mark.

During the same period, the S&P 500 index has been hitting new all-time highs almost daily, and individual stocks in popular sectors on Wall Street like AI, semiconductors, and energy have surged across the board. Against this backdrop, ETH's performance looks even more embarrassing.

However, the good news is that, looking at the long-term cycle, ETH's price chart has merely been consolidating in a multi-year range. Ethereum's current market cap is over $200 billion, its price has consistently held the $2,000 level for years, and it firmly ranks among the top 100 global assets by market cap. Throughout the history of capital market development, it is common for high-quality growth assets to experience several years of sideways consolidation and bottoming before embarking on a long-term bull run.

Ignore the percentage change values; the focus is on measuring how long the price stays within that range.

The world's top global giants like Amazon, Nvidia, Apple, and Microsoft have all gone through the same process:

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

• Nvidia: Experienced seven years of prolonged consolidation in the 2010s, then rode the AI wave to an epic surge in stock price, joining the top tier of global market cap.

• Apple: Wandered in long-term confusion and volatility during the 80s and 90s, only taking off after Jobs returned to the company in 1997.

• Microsoft: Its stock price consolidated sideways for about 15 years after 2000. Investors who entered in 2000 didn't break even until 2015. Today, it's the world's second-largest company by market cap.

It's not hard to see the pattern: Most top-tier global assets go through long, boring periods of consolidation. Some spike briefly to new highs before falling back, waiting for the next industry catalyst to start a new bull run. Moreover, during the consolidation and bottoming phase of these companies, the broader stock market was often continuously hitting new highs. Within this logic, ETH's weak performance over the past five years is not abnormal in financial history.

Putting price aside, Ethereum's fundamentals are actually at their best stage ever.

On-Chain Ecosystem Data Continues to Improve

According to the market's pessimistic narrative, a weakening market price should be accompanied by a slide in on-chain activity: declining transaction volume, high fees, and stagnant application adoption. But the actual data shows the complete opposite. Ethereum's on-chain transaction volume is steadily climbing, fees are at cyclical 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. Compared to the exorbitant Gas fees of $50~$100 during the 2021 bull run, costs have dropped significantly even as transaction volume has doubled.

Total on-chain addresses have surpassed 400 million, with the average daily address growth rate around 0.08% in 2026. In recent months, daily active users on-chain have steadily exceeded 1 million. At this current growth rate, barring a major positive industry catalyst, Ethereum's total addresses could exceed 1 billion by mid-2029.

Staking metrics are also continuously breaking records: Over 32% of all ETH is now staked, continuously providing security for the network.

Data Source: validatorqueue.com

In summary, Ethereum has completed its scaling iteration while maintaining decentralization and security. It has never experienced a full network outage in over a decade since its launch. By providing extremely neutral, secure, and programmable block space, it has the core chips to compete for becoming the foundational infrastructure for global finance. This is also a prerequisite for subsequently accommodating the tokenization of trillions in traditional assets.

Becoming the Foundational Infrastructure for the Global Financial System

Since I entered 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 business on the settlement layer.

In its first decade, Ethereum primarily served as a testing ground for crypto-native assets, where sectors like DeFi, NFTs, and meme coins were born and matured, solidifying the underlying ecosystem's foundation. In the next phase of development, Ethereum will embark on a new journey towards a trillion-dollar market cap.

For seasoned crypto-native players, the onboarding of traditional finance onto the chain might seem a bit dull, but it's an indispensable step for blockchain to go mainstream, and the entire industry should support it. In the future, the vast majority of the $700 trillion in global traditional physical assets will eventually be tokenized on-chain, and Ethereum will become the preferred hosting network.

Many refute this, arguing that Ethereum's scalability isn't sufficient to handle massive asset volumes, or that other public chains will eat its lunch. However, current adoption data has already disproven this view: Traditional financial institutions are flocking to the Ethereum ecosystem in large numbers.

A series of news headlines from the past two years or so. Notice a common theme?

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

Of course, other public chains like Hyperliquid and Solana can also get a piece of the pie. The tokenization track is large enough to accommodate the development of multiple public chains; it's impossible for one to take it all. But traditional institutions seeking stability will prioritize Ethereum when deploying RWA.

Adoption data supports this view: Stablecoins were the first tokenized real-world assets to achieve product-market fit, with a circulating market cap exceeding $300 billion. Tom Lee called stablecoins the "ChatGPT moment" for the crypto industry. Ethereum captures 54% of the total stablecoin market cap.

Data Source: rwa.xyz

As of June 1, 2026, the total market size of tokenized real-world assets (RWA) across all categories has exceeded $30 billion, with the track's growth curve steeply sloping upward. Over 53% of these RWA assets are deployed on the Ethereum chain. Even if other public chains start from zero to compete for the non-stablecoin RWA share, Ethereum firmly maintains its dominant position.

Data Source: rwa.xyz

The current development stage of the RWA track parallels the nascent DeFi period of 2019-2020: clear new track logic, steadily rising early-stage data. Looking back at DefiLlama data, DeFi's Total Value Locked (TVL) saw exponential growth in the first half of 2020, while ETH's price was also experiencing a long-term sideways consolidation at that time.

When the DeFi bull run fully erupted and yield farming became a craze, ETH's market cap was only $20-$25 billion, suppressed by the COVID market crash, which was ten times smaller than its current market cap of $230 billion. Around the same time, the newly launched BNB Chain once threatened Ethereum's position with its low fees. It wasn't until the DeFi asset value reached about 20% of Ethereum's total market cap that ETH launched from $300, skyrocketing to $4,000 by year-end, embarking on a super bull run.

Compare this to the present: Excluding stablecoins, the total value of non-stablecoin RWA on Ethereum is about $16 billion, only 7% of ETH's total market cap. Its position is analogous to the early DeFi stage, but the overall scale is ten times larger: Early DeFi started with $3 billion, today's RWA starts with $30 billion; Early ETH bottom was $200, today's ETH bottom is $2,000; Early competitor was BNB Chain, today's competitor is Hyperliquid.

Additional note: In the early DeFi days, collateral demand created a large amount of ETH buying pressure, and NFTs further reinforced the "ETH equals digital gold" narrative. However, Ethereum had not yet implemented PoS staking and the EIP-1559 burn mechanism back then. Now, both mechanisms are in place, meaning every single on-chain transaction directly brings deflationary pressure and value support to ETH.

Extrapolating based on ten times the space, the total RWA (excluding stablecoins) scale in this cycle could surpass $1 trillion. The US CLARITY Act could be a key catalyst. According to Polymarket data, the probability of the bill being signed into law in 2026 is around 55%. Its passage would open the compliant on-ramp for financial assets across the US, becoming a huge positive for Ethereum.

Ethereum's Vitality Remains Strong

Stocks, bonds, commodities, real estate, art, intellectual property – every valuable asset will eventually be tokenized. This is the next major innovation in global finance.

The first twenty years of the crypto industry focused on the issuance and innovation of crypto-native assets. The next twenty years will see the industry's focus shift to onboarding traditional physical assets onto the chain.

Even though the current crypto commentary sphere is generally bearish on Ethereum, I am still convinced: Ethereum will become the foundational layer for the vast majority of tokenized assets globally. Relying on years of accumulated security, reliability, and liquidity moats, Ethereum's advantages cannot be replicated quickly. Once trillions in global assets are settled on Ethereum, the market will eventually re-price ETH, replicating the valuation surge of the past.