Legendary cyberpunk Nick Sabo and co-founder of ThinkClassy Capital, Ryan Watkins explained the conflicting framework for understanding Ethereum rise and its evaluation mechanisms in two X-posts. And they come together and read like a contrast of points about what actually drives the price of Layer 1.
Ethereum prices have nothing to do with practicality
Szabo’s core argument is clear. “The fundamental problem with valuing ETH is that the main use cases of Ethereum have little to do with the market value of ETH.” In his view, Ethereum is “very convenient,” and its application “can earn a lot of money,” but “ETH can still be low-cost and vice versa, with little connection between the two.”
He contrasted this with Bitcoin, “the main use case is a storage means of value that is strongly associated with price,” adding, “Because the basic design of Bitcoin is much more suitable for this use case, ETH must not only mimic it, but also rely on other use cases that are less relevant to price.” For Szabo, the core is structural. While practicality at Ethereum certainly does not translate into value acquisition through ETH, Bitcoin’s purpose and price are intertwined by design.
Sabo, who returned to X in late September 2025 after five years of leave, responded to Watkins’ response. Researchers approach the market from the opposite angle, claiming that investors routinely overdesign layer 1 valuation models, with prices and narratives doing hard work. “I see people overthinking the valuation of L1,” he wrote, assembled the final part of ETH’s strength as a narrative axis rather than a breakthrough in the spreadsheet.
Why have ETH prices tripled since April?
“The only difference between the 1400 and 5000 ETH was Bitmine.” In April he said, “Ethereum was a dying platform.” Currently, “This is a stablecoin chain and will be the next ‘Bitcoin-like’ opportunity for institutions.” The lesson he draws is straightforward. “Price leads the story as people say.”
What’s important is that Watkins doesn’t claim that these stories are justified, but emphasizes the void they fill. “What’s important here isn’t whether or not one of these is justified. The key is that the absence of an agreed assessment technique creates a void that can only be filled by the narrative and relative framework.”
He is not convinced, he raises competing bullish cases as unresolved hypotheses. “Is the bullish case of ETH that means it’s a profitable rate on global GDP? What about it like to become a ‘programmable Bitcoin’ that is essentially unvaluable? How about both? Who knows the truth?”
That uncertainty pushes the market in a direction that locks it into simple comparisons and flows: “So what happens when the market pins it into relative value and narrative? BTC is $2 trillion. So who can say that ETH should not be 50% of that? ETH offers a superset of Bitcoin capabilities, right? ETH is $500 billion. Why shouldn’t SOL be more than 100% of that? SOL is a great product with greater traction.” Over almost all economies, metric. ”
He dismisses these as “dilty” exercises, but they are useful for navigation. “We can theorize everything we want, or we can navigate the environment in front of us.” Until the basics are reaffirmed, “Don’t overthink.” He clearly defines the edge in his last sentence. “Assets that permeate mainstream consciousness and survive over time have a huge competitive advantage: the flow and story game that leads to the party stopping.”
Both views may be valid at the same time. The market may continue to price ETH primarily through narrative and relative value, but the questions that Sabo raises – whether Ethereum design can wire a permanent link between network utilities and token values - remains unresolved. For now, this argument itself is a signal. ETH is going through a cycle in which recognition of the purpose determines the tone, rather than simply an analogue of measurable cash flow.
At the time of writing, ETH was trading at $4,701.92.
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