Is ETH a Commodity or a Security? The Market Has Decided

Yesterday at Token2049, there was a panel discussion titled "Ethereum’s Existential Crisis" - and one part of the conversation really stood out to me.

Over the past few months, Ethereum’s core developers have dramatically shifted their priorities. They've announced plans to increase L1 throughput 10x over the next two years, and 100x over the next four. This pivot is largely driven by growing competition from Solana and others - as well as frustration that most of Ethereum’s value capture is happening on L2s, not the base layer.

The panelists highlighted several reasons behind Ethereum’s new direction. Two caught my attention:

• The rise of Solana, which is now leading in both user activity and protocol revenue.
• The drop in ETH/BTC ratio, which many see as a sign that Ethereum needs to restore investor confidence.

Think about that for a second: ETH isn’t being treated like a commodity, but like a security. Most commodity producers compete by offering lower prices than their rivals. But in Ethereum’s case, people expect the "organization behind it" to push the price up, not down - like a company trying to please shareholders.

And that’s the heart of the old Gary Gensler question: is ETH a security? Well, regardless of legal status, it’s clearly perceived that way by much of the industry.

One bright spot? Vitalik’s name didn’t come up at all during the discussion about Ethereum’s future. So if things go south, there’s still room to say none of this reflects the original vision behind the network.

And by the way - if you're looking to swap ETH at the best rates and with zero sign-up, rabbit.io is always open.