The ETH/BTC ratio has slumped roughly 65% since September 2022, from near 0.085 to about 0.028 by late May 2025. Ether trades below $2,000, down 21% over the past year. This week, ICO-era participant and Ethereum builder Reid published a critique blaming specific execution failures at the Ethereum Foundation for the sustained underperformance.
The Merge's missed message
The Merge's 99.95% energy-reduction message answered questions capital allocators never asked, Reid argues. Institutions wanted yield. Developers wanted finality. Users wanted cheaper transactions. None got a clear answer. Instead, the narrative shift toward proof-of-stake didn't translate into demand for ether.
Solana's head start
Solana launched mainnet beta in March 2020 and shipped wallets, DEXs, and money markets while Ethereum debated specs. By the time Ethereum had its own functioning ecosystem, Solana had already captured significant developer and user mindshare. The integrated L1 shows fee capture accruing directly to its native token — a model that contrasts sharply with Ethereum's fragmented layer-2 landscape.
The L2 capital drain
Every major L2 issued its own token, fragmenting capital flows inside the ecosystem. Arbitrum has marketed 90-98% operating margins on its L2s; Base captured close to 70% of rollup profits by mid-2025. Meanwhile, Ethereum's quarterly transaction fee revenue has fallen roughly 95% from a Q4 2021 peak of $4.3 billion. EIP-4844 went live in March 2024 and pushed blob fees near 1 wei through most of 2024-2025, but that only deepened the revenue collapse.
Missing first-party staking
Three years after the Merge, there is no first-party staking app. The official path requires running a validator with at least 32 ETH; most users route through Lido (24% of staked ETH) despite centralization warnings. Reid remarked, 'We don't pick winners' is what an organization says when it does not want to compete.
Reid says he is still long ether. But his critique leaves a pointed question hanging: if the Foundation won't pick winners, who will? The answer may determine whether ETH can reclaim its ratio or keep bleeding to Solana and the L2s.
