$ETH is emerging as a macro reserve asset: scarce, yield-bearing, and deeply integrated with the next financial system.

In a new op-ed, @Etherealize_io co-founder @gphummer lays out why $ETH is poised to be the neutral settlement layer as trillions in global assets move onchain.

Here’s the pitch.👇

$ETH — the asset that powers and secures Ethereum — plays three roles in this new system:

➢ Digital oil (burned for every computation, transfer, or tokenized asset)

➢ Productive store-of-value (pays native yield via staking)

➢ Pristine collateral (non-sovereign, censorship-resistant, custodied by protocol)

Each role ties $ETH to core economic functions. The more it’s used, the more it’s burned, locked, and accumulated.

With gross issuance capped at 1.51% and net issuance averaging just 0.1%/yr post-merge, while ~80% of fees are burned, $ETH’s supply can trend toward zero or even negative. It tracks the upside of the digital economy while minimizing dilution.

Why $ETH Is Structurally Different from BTC

BTC repriced first because its “digital gold” narrative is easy to grasp. $ETH’s pitch — (fuel, collateral, ownership stake) — is more complex, but grounded in broader, more durable demand.

$ETH combines reserve-like scarcity with the necessity of an industrial input. Its value scales with onchain economic throughput, not just perception.

$ETH's Unique Monetary Design

Ethereum validators run on minimal overhead, requiring far less issuance to stay profitable. With the fee burn in place, $ETH’s supply curve resembles compressed oil production: rising usage, flat output.

Why $ETH Has Lagged BTC — and Why That Won’t Last

$ETH’s slower repricing reflects complexity, not weakness:

➢ BTC = simple narrative (“digital gold”); $ETH = multi-role asset

➢ Ethereum shifted activity to Layer 2s, lowering Layer 1 revenue and muddling models

➢ U.S. regulatory ambiguity deterred institutions

➢ Widespread $ETH use as collateral led to auto-liquidations during deleveraging

Those headwinds are fading. Fee burns are steady, staking rewards are stable, and ETH/BTC is near 2018 lows, even as Ethereum secures 10× more value today.

Catalysts in Motion

➢ Layer 2 explosion — @base, @zksync, Superchain rollups scale to 1,000s of TPS. Interop advances enable seamless Layer 2-to-Layer 2 execution.

➢ Tech breakthroughs — Real-time proving, account abstraction, and Layer 1 scaling unlock new capabilities daily.

➢ Regulatory clarity — $ETH confirmed as commodity. Spot ETFs launched. EU and Singapore legalized staking.

➢ Institutional tokenization — BlackRock, Franklin Templeton, UBS, and Sony all settling assets on Ethereum or anchored Layer 2s.

➢ Strategic $ETH reserves — DAOs, protocols, and firms (e.g. Coinbase, Deutsche Bank) are stockpiling staked ETH.

$ETH is evolving from tech speculation to macro reserve.

Valuing ETH: Beyond DCF

$ETH can’t be valued like equity; it burns fees instead of distributing them. $ETH is a hybrid commodity-reserve: consumed, staked, transacted, stockpiled.

$ETH’s fully diluted market cap could plausibly mirror traditional reserve assets if Ethereum underpins even 10% of global financial flows.

The AI Multiplier

AI will demand a machine-native financial system: programmable, borderless, final. Ethereum is already there.

➢ Atomic composability — Agents can act in a single transaction.

➢ Code-enforced rights — No courts, no intermediaries.

➢ Permissionless liquidity — Agents can hold treasuries, stablecoins, RWAs.

If AI agents come to manage trillions, $ETH is the only Layer 1 that scales with them. Each action burns $ETH or settles back to Layer 1.

Roadmap Signals

Every upgrade boosts $ETH’s economic surface area while keeping supply capped. The result: demand scales, supply doesn’t.

Quantifying the Opportunity

If Ethereum captures 10% of a $500T global asset base and ~30bps of annualized fees are burned, $ETH enters a negative net issuance regime: supply-constrained, demand-driven, and self-reinforcing over decades.

At $89T in reserve value, $ETH = ~$740k. Even hitting just gold’s $22T implies ~$185k/ETH, 66× from mid-2025 levels near $2.8k. Plus a 3% native yield while you wait.

Investment Takeaways

➢ $ETH trades at <0.03 BTC and <40% of its 2021 peak, while network usage and institutional adoption are all-time high.

➢ Staking yield turns $ETH into a productive asset, unlike BTC.

➢ $ETH is the natural second core position next to BTC: beta to onchain GDP, with deflationary supply.

Risks: roadmap execution, consensus bugs, Layer 1 competition, regulatory shifts. But none alter $ETH’s supply mechanics, they just shift the timeline.

Conclusion

Ethereum is the settlement layer for the internet of value. $ETH isn’t just “gas” — it’s scarce, yield-bearing, non-sovereign commodity money that regulates the system itself.

As tokenized assets, AI agents, and treasuries converge on Ethereum, $ETH becomes reflexively scarce: usage burns it, conviction rises, supply locks, scarcity deepens.

In the low case, $ETH re-rates to match current utility. In the base case, it gains a gold-like premium. In the high-conviction case, it becomes the reserve asset of a financial system bigger than many nations.

The question is no longer “Why own $ETH?” but:
“How underexposed am I to the reserve asset of the next financial system?”