Author: HashGlobal KK Hash Global Founder
Compiled by: Jiahuan, ChainCatcher
The author has liquidated all held ETH positions. This article was published on May 24th.
Recently I read an article with the viewpoint that if the US CLARITY Act passes, Ethereum will become the biggest winner.
Its core argument is that ETH could become the only asset under the US regulatory framework that possesses both "decentralized digital commodity" and "programmable smart contract platform" attributes. Therefore, ETH's valuation framework should shift from 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 overextended.
This is not to say I am bearish on ETH or deny the benefits of CLARITY.
On the contrary, regulatory clarity is undoubtedly a significant positive for ETH. It will reduce compliance concerns for institutional allocation to ETH and help further develop ETFs, custody services, staking, institutional DeFi, RWA, and on-chain settlement businesses.
However, regulatory clarity is not equivalent to a monetary premium.
CLARITY may resolve ETH's "regulatory discount," but it will not automatically open up valuation space related to gold, real estate, or global reserve assets.
These are two distinctly different matters and should be analyzed separately.
1. The Market Hasn't Bought Into This Logic Yet
If the market truly viewed ETH as "programmable gold" or a "yield-bearing monetary asset," its valuation should be much closer to BTC's.
But that is not the case.
When evaluating ETH, the market still focuses on specific metrics:
- Ethereum mainnet revenue;
- DeFi activity levels;
- Whether stablecoins and RWAs settle primarily within the Ethereum ecosystem;
- Value flow from L2 to L1;
- ETH staking yields;
- Fund 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 no discussion of network revenue. Its logic is simple: 21 million supply cap, non-sovereign, censorship-resistant, digital gold. People may not agree with this narrative, but it is simple, clear, and easy to propagate.
ETH's narrative is far more complex. ETH serves as gas fees, a staking asset, DeFi collateral, an L2 settlement asset, and infrastructure for institutional on-chain finance. While multiple functions are an advantage, monetary premiums typically require an extremely simple narrative.
Complexity benefits ecosystem development but does not necessarily contribute to forming a monetary premium like gold and BTC.
2. Legal Classification is Just the Entry Ticket
The original article makes a critical leap: because ETH may be legally recognized as a decentralized digital commodity, it should enter the valuation framework of top-tier monetary premium assets.
I believe this inference is problematic.
Legal classification solves the question: Can institutions hold it compliantly? Can they trade it compliantly? Can they provide compliant custody? Can they develop related products compliantly?
Monetary premium solves the question: Is the global market willing to hold it as a long-term store of wealth?
These are two different questions.
Gold possesses a monetary premium not because any single law classifies it as such, but because millennia of historical consensus, physical scarcity, central bank reserve demand, and geopolitical safe-haven attributes have collectively formed a massive consensus.
BTC possesses a monetary premium not because it can execute smart contracts, but because it is simple enough, pure enough, and sufficiently resembles "digital gold."
For ETH to gain a monetary premium, regulatory classification alone is insufficient. It must also prove that global capital is willing to hold ETH as a long-term store of value, not just as a significant on-chain financial infrastructure asset.
There remains a significant gap between these two states.
3. DeFi Will Weaken ETH's "Sole Yield-Bearing" Narrative
The original article emphasizes an advantage of ETH: ETH can generate yield through staking, whereas BTC and gold cannot.
While this holds some truth today, the situation may change in the coming years.
With the development of DeFi and RWAs, many assets will be tokenized in the future. Gold, treasuries, 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 borrowed/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 asset that "generates yield."
Tokenized gold integrated with DeFi can also generate on-chain yield. Tokenized treasuries and money market funds inherently possess underlying 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 questions will become: Which is better collateral? Which has lower volatility? Which has clearer yield sources? Which has higher regulatory acceptance? Which is more suitable for institutional balance sheets? Which is easier for global capital to hold long-term?
From this perspective, ETH may have no advantage compared to 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 with "superior to gold."
4. Monetary Premium Belongs to BTC, Gold, and Tokenized Gold
I am more inclined to believe that in the future, monetary premiums 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 become very attractive. It would inherit gold's historical credibility while gaining on-chain liquidity, composability, and collateral capability. In this scenario, gold's monetary premium wouldn't necessarily flow to ETH; on the contrary, it might be further strengthened by tokenized gold itself.
This isn't necessarily bad for ETH. These tokenized assets also require on-chain infrastructure and could be issued, traded, and collateralized on Ethereum or Ethereum L2s.
However, this means ETH is more of an infrastructure asset, not the ultimate monetary premium asset.
Infrastructure is certainly valuable. But infrastructure valuations typically revert to usage metrics, revenue, network effects, and value capture, not direct analogies to gold's total market cap, real estate's monetary premium, or the global reserve asset pool.
5. Ethereum's Value Capture Problem Remains Unresolved
The original article posits that CLARITY will widen the gap between ETH and other smart contract platforms, with other L1s potentially entering a second-tier valuation, while ETH remains in the first tier.
This judgment also requires cautious treatment.
The real world will not choose a blockchain based solely on US regulatory classification.
Different countries, assets, and institutions will choose 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;
- Need for a permissioned environment.
Many RWA, stablecoin, and payment scenarios may not necessarily choose the 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 significant 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 expand the Ethereum ecosystem, they also pose a question: once L2s scale, how much value truly flows back to ETH?
If large transaction volumes occur on L2s with continuously decreasing 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 capability remains to be proven.
One cannot assume that Ethereum ecosystem growth automatically translates into proportional ETH value appreciation.
This is why I believe ETH's valuation must revert to concrete questions about network revenue, settlement demand, collateral demand, staking yield, and ecosystem value flow.
6. Using Ethereum ≠ Buying ETH
Another distinction is needed: institutions entering on-chain finance does not mean they will allocate 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;
- Indirectly access on-chain finance through service providers.
None of these require them to purchase large amounts of ETH.
Just as companies heavily using cloud services do not necessarily buy the cloud service company's stock, institutions using blockchain infrastructure do not necessarily need to hold the underlying token long-term.
For ETH to transition from a "used network" to a "long-term held asset," a clear value capture mechanism is needed.
If this mechanism remains unclear, the market will continue to evaluate ETH based on revenue, fees, staking yield, and ecosystem growth.
7. Grand Narratives Can't Support Valuation Anymore
In the last cycle, the market was willing to assign valuations based on grand narratives.
"World computer," "Internet of Value," "Global settlement layer," "Decentralized financial cornerstone" – these narratives were very powerful. Ethereum was undoubtedly the most important representative.
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 closed-loop business logic?
As we have repeatedly emphasized in recent years, Web3 cannot just stay at the vision stage; 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 valuation long-term.
The same applies to ETH.
While it is certainly one of the most important Web3 infrastructures, for higher valuation, the market may need to see:
- Resurgence of DeFi growth;
- Recovery of mainnet revenue;
- Clearer value flow from L2 to L1;
- Real settlement demand for stablecoins and RWAs within the Ethereum ecosystem;
- Sustained growth in ETH collateral demand;
- Institutions not just using Ethereum, but genuinely needing to hold ETH.
None of these can be automatically achieved by a single piece of legislation.
8. CLARITY's Real Significance is Fixing the Regulatory Discount
Therefore, I tend to view CLARITY's impact on ETH as reducing the regulatory discount, not unlocking a multi-trillion dollar monetary premium revaluation potential.
ETH did face regulatory uncertainty in the past. If US regulators more clearly recognize ETH's commodity attribute, that would be a significant positive.
However, this would shift ETH from a "network asset with regulatory tail risk" to a "network asset with clearer regulation."
This is already significant.
But it does not mean 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 yield, L2 value flow, DeFi activity, RWA settlement volume, and institutional usage, then ETH's valuation will remain constrained by fundamentals.
This isn't necessarily bad. Excellent 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 aspects: 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 developer, application, asset, and institutional recognition.
Fifth, as Web3 enters large-scale commercial applications, it may become an extremely important underlying trust and settlement asset.
However, these values are 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 not necessarily the pure monetary premium enjoyed by BTC or gold.
ETH has significant long-term value, but its valuation framework should not be incorrectly substituted.
10. CLARITY Benefits ETH, But Don't Treat ETH Like Gold
My core judgment on this matter is straightforward:
CLARITY benefits ETH, but this does not mean ETH should be valued like gold.
Regulatory clarity is a positive, but it is not equivalent to a monetary premium.
ETH is an extremely important on-chain financial infrastructure asset, but it may not become the ultimate store of wealth for the world.
In the future, those truly enjoying monetary premiums will likely still primarily be BTC, gold, and potentially tokenized gold and other high-credit store-of-value assets. ETH is more likely to serve as the core infrastructure for these assets to be on-chain, circulated, collateralized, settled, and composed.
This position is already important enough; there's no need to force-fit ETH into a "superior to gold" narrative.
A more robust valuation framework for ETH might be: regulatory clarity drives discount repair; institutional entry drives demand increase; DeFi, RWA, stablecoin, and L2 ecosystems determine network usage; network revenue, collateral demand, and value flow determine long-term valuation; monetary premium can be an optimistic scenario but should not be the base assumption.
These are my main reservations regarding the ETH revaluation argument.
The Web3 industry often extrapolates real positives into huge valuation stories. While imagination is valuable, returning to fundamental questions 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 truly come from? If the ecosystem develops, will value really accumulate to this token?
If these questions cannot be clearly answered, regulatory classification alone will struggle to support a genuine valuation leap.
