Hash Global Founder: Why I Also Chose to Liquidate All My ETH?

Author: HashGlobal KK Hash Global Founder

Compiled by: Jiahua, ChainCatcher

The author has liquidated all holdings of ETH, and this article was published on May 24.

Recently, I read an article that argued if the U.S. CLARITY Act passes, Ethereum will be the biggest winner.

The core argument is that ETH may become the only asset under the U.S. regulatory framework that possesses both "decentralized digital commodity" and "programmable smart contract platform" attributes. Therefore, the valuation framework for ETH 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 enlightening, but the conclusion may be somewhat overstretched.

This is not to say that I am bearish on ETH or deny the positive implications of CLARITY.

On the contrary, regulatory clarity is undoubtedly a significant positive for ETH. It will reduce compliance concerns for institutions allocating ETH and help further develop ETFs, custody services, staking, institutional DeFi, RWA, and on-chain settlement businesses.

However, regulatory clarity does not equate to monetary premium.

CLARITY may address the "regulatory discount" issue 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 has not bought into this logic yet

If ETH were truly regarded by the market as "programmable gold" or "yield-generating currency asset," its valuation should be closer to BTC.

But that is not the case.

When assessing ETH, the market still focuses on specific indicators:

• Ethereum mainnet revenue;
• DeFi activity;
• Whether stablecoins and RWA primarily settle within the Ethereum ecosystem;
• Value flow from L2 to L1;
• ETH staking yield;
• Inflows into ETH ETFs;
• Competition from ecosystems like Solana, BNB Chain, and Base.

These are essentially valuation logics for network assets, platform assets, and ecosystem assets.

BTC is different. It has no cash flow, no application ecosystem, and does not require discussion of network revenue. Its logic is simple: a supply of 21 million, non-sovereign, censorship-resistant, digital gold. People may not agree with this narrative, but it is simple, clear, and easy to spread.

The narrative for ETH is much more complex. ETH serves as gas fees, staking assets, DeFi collateral, L2 settlement assets, and the infrastructure for institutional on-chain finance. While multifunctionality is an advantage, monetary premium typically requires a very simple narrative.

Complexity benefits ecosystem development but does not necessarily help form a monetary premium like gold and BTC.

2. Legal classification is just a ticket to entry

The original text made a key leap: because ETH may be legally recognized as a decentralized digital commodity, it should enter the valuation framework of first-tier monetary premium assets.

I believe this inference is problematic.

The issue that 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?

The issue that 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 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 collectively 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 sufficiently like "digital gold."

For ETH to gain a monetary premium, regulatory classification alone is not enough. It must also prove that global capital is willing to hold ETH as a long-term store of value, not just as an important on-chain financial infrastructure asset.

There remains a significant gap between these two states.

3. DeFi will weaken ETH's "unique yield-generating" narrative

The original text emphasized one advantage of ETH: ETH can generate yield through staking, while BTC and gold cannot.

While this makes some sense 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, government bonds, money market funds, real estate funds, income 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:

• Can be used as collateral;
• Can be lent;
• Can be used for market-making;
• Can be combined into structured yield products;
• Can be integrated with DeFi protocols;
• Can form closed-loop on-chain capital flows with stablecoins.

Therefore, in the future, ETH will not be the only "yield-generating" asset.

Tokenized gold integrated with DeFi can also generate on-chain yield. Tokenized government bonds and money market funds inherently have base yields. Tokenized real estate funds and other RWAs can also generate cash flow.

By then, the question will no longer be "ETH can generate yield, gold cannot."

The real question will become: Who is the better collateral? Who has lower volatility? Who has clearer sources of yield? Who has higher regulatory recognition? Who is more suitable for institutional balance sheets? Who is easier for global capital to hold long-term?

From this perspective, ETH may not have an advantage compared to tokenized gold, tokenized government bonds, or tokenized money market funds.

ETH's staking yield comes from the network security mechanism, not traditional risk-free returns. It carries protocol risk, validator risk, slashing risk, liquidity 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 with "superior to gold."

4. Monetary premium belongs to BTC, gold, and tokenized gold

I tend to believe that in the future, monetary premium will mainly belong to BTC, gold, and potentially tokenized gold.

BTC's positioning is very clear: digital gold.

Gold's positioning is also very clear: the most important non-sovereign store of value in the traditional world.

If tokenized gold develops, the situation could be very attractive. It will inherit gold's historical credit while gaining on-chain liquidity, composability, and collateral capabilities. In this case, gold's monetary premium may not necessarily flow to ETH; rather, it may be further strengthened by tokenized gold.

This may not be a bad thing for ETH. These tokenized assets also need on-chain infrastructure and can be issued, traded, and collateralized on Ethereum or Ethereum L2.

However, this means that ETH is more of an infrastructure asset rather than the ultimate monetary premium asset.

Infrastructure is certainly valuable. But the valuation of infrastructure typically returns to usage metrics, revenue, network effects, and value capture, rather than directly comparing it to the total market value of gold, the monetary premium of real estate, or the global reserve asset pool.

5. Ethereum's value capture issue remains unresolved

The original text suggests that CLARITY will widen the gap between ETH and other smart contract platforms, with other L1s potentially entering a second tier of valuation while ETH remains in the first tier.

This judgment also needs to be treated with caution.

The real world will not choose blockchains solely based on U.S. regulatory classifications.

Different countries, assets, and institutions will choose underlying networks based on various 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 RWAs, stablecoins, and payment scenarios may not necessarily choose the Ethereum mainnet. They may opt for L2s, application chains, consortium chains, or other L1s that better align with local regulations and business needs.

More importantly, even if there is a lot of activity within the Ethereum ecosystem, it does not guarantee that ETH will capture value proportionately.

As we have seen in recent years, while L2 has expanded the Ethereum ecosystem, it has also raised a question: once L2 scales, how much value can truly flow back to ETH?

If a large volume of transactions occurs on L2s with declining fees, and the application layer and L2 itself 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 as the Ethereum ecosystem grows, ETH's value will appreciate in tandem.

This is why I believe ETH's valuation must return to specific issues such as network revenue, settlement demand, staking demand, staking yield, and ecosystem value flow.

6. Using Ethereum ≠ Buying ETH

It is also necessary to make a distinction: institutions entering on-chain finance do not necessarily mean they will allocate ETH as a core asset.

Institutions may:

• Use the Ethereum network;
• Use Ethereum L2;
• Issue tokenized funds;
• Use stablecoins for settlement;
• Use on-chain custody and compliance 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 enterprises that heavily use cloud services do not necessarily buy stocks of cloud service companies, institutions using blockchain infrastructure do not necessarily need to hold the underlying tokens long-term.

For ETH to transition from "a network being used" to "an asset being held long-term," a clear value capture mechanism is needed.

If such a mechanism remains unclear, the market will continue to evaluate ETH based on revenue, fees, staking yields, and ecosystem growth.

7. Grand narratives can no longer support valuations

In the previous cycle, the market was willing to assign valuations based on grand narratives.

"World computer," "value internet," "global settlement layer," "cornerstone of decentralized finance"—these narratives are very powerful. Ethereum is undoubtedly the most important representative among them.

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 path? Where is the business logic closed loop?

As we have repeatedly emphasized in recent years, Web3 cannot merely remain at the level of vision; it must ultimately return to fundamental values 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 maintain valuations in the long term.

This applies equally to ETH.

While it is certainly one of the most important Web3 infrastructures, for it to achieve a higher valuation, the market may need to see:

• A resurgence of DeFi;
• A recovery of mainnet revenue;
• A clearer value flow from L2 to L1;
• Real settlement demand for stablecoins and RWAs within the Ethereum ecosystem;
• Continued growth in ETH staking demand;
• Institutions not only using Ethereum but also needing to hold ETH.

None of these can be automatically achieved through a single piece of legislation.

8. The true significance of CLARITY is to fix the regulatory discount

Therefore, I tend to view the impact of CLARITY on ETH as reducing the regulatory discount rather than unlocking the potential for a multi-trillion-dollar monetary premium revaluation.

ETH has indeed faced regulatory uncertainty in the past. If U.S. regulators more clearly recognize ETH's commodity attributes, that would be a significant positive.

However, this will transform ETH from "a network asset with regulatory tail risks" to "a network asset with clearer regulation."

This is already significant.

But it does not mean that 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 yields, L2 value flows, DeFi activity, RWA settlement volumes, and institutional usage, then ETH's valuation will continue to be constrained by fundamentals.

This is not necessarily a bad thing. Excellent infrastructure assets should have high value. But they are not equivalent to monetary premium assets.

9. My stance on ETH

I still believe that ETH is one of the most important assets in the digital asset industry.

Its long-term value comes from several aspects: First, it is the most important open-source smart contract network.

Second, it is the 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.

Fifth, as Web3 enters large-scale commercial applications, it may become an extremely important underlying trust and settlement asset.

However, this value is more akin to infrastructure value, network value, ecosystem value, and collateral value.

It may enjoy some scarcity premium, regulatory clarity premium, and network effect premium, but it does not necessarily have the pure monetary premium enjoyed by BTC or gold.

ETH has significant long-term value, but its valuation framework should not be mistakenly replaced.

10. CLARITY is positive for ETH, but don’t treat ETH as gold

My core judgment on this matter is straightforward:

CLARITY is positive for ETH, but that does not mean ETH should be valued like gold.

Regulatory clarity is a positive, but it does not equate to monetary premium.

ETH is an extremely important on-chain financial infrastructure asset, but it may not necessarily become the ultimate store of global wealth.

In the future, the true beneficiaries of monetary premium will likely still be BTC, gold, and potentially tokenized gold and other high-credit value storage assets. ETH is more likely to serve as the core infrastructure for these assets to be on-chain, circulated, collateralized, settled, and combined.

This position is already significant enough; there is no need to force ETH into the narrative of "superior to gold."

A more robust valuation framework for ETH might be: Regulatory clarity drives discount repair; institutional entry drives demand increase; DeFi, RWA, stablecoins, and L2 ecosystems determine network usage; network revenue, staking demand, and value flow determine long-term valuation; monetary premium can be seen as an optimistic scenario but should not be the foundational assumption.

This is my main reservation regarding the revaluation argument for ETH.

The Web3 industry often extrapolates real positives into huge valuation stories. While imagination is valuable, returning to fundamental issues is more critical.

What problem does this asset actually solve? Who will hold it long-term? What are the returns and risks of holding it? Where does its value actually come from? If the ecosystem develops, will value really accumulate to this token?

If these questions cannot be answered clearly, it will be difficult for regulatory classification alone to support a true leap in valuation.