Ethereum insider blames Foundation for 65% ETH drop vs BTC

A developer known as Reid published a detailed critique that attributes ether’s roughly 65% decline versus Bitcoin to execution failures at the Ethereum Foundation. He identifies missed product launches and specific internal decisions as the causes of the token’s relative underperformance since the Merge in September 2022. Reid describes the result as accumulated execution debt and discloses he remains long ether.

Public market data matches Reid’s headline figure. The ETH/BTC ratio was near 0.085 around the Merge in September 2022 and fell to about 0.028 by late May. Ether trades below $2,000 and is down roughly 21% over the past year.

Reid wrote that the Merge’s 99.95% energy reduction answered questions few institutional allocators prioritized. He wrote that institutions sought yield, developers sought finality and users sought lower transaction costs. Proof‑of‑stake had appeared on Ethereum’s roadmap since 2015 and shipped in 2022, seven years later. Reid notes that competing chains, including one that launched a mainnet beta in March 2020, released wallets, decentralized exchanges and money markets in the same period.

The critique highlights the absence of a first‑party staking interface three years after the Merge. Users still must run a validator with at least 32 ETH or use third‑party services. Most retail staking flows through providers such as Lido, which holds about 24% of staked ETH. Reid wrote: ‘We don’t pick winners’ is what an organization says when it does not want to compete, a line he uses to criticize the Foundation’s reluctance to build consumer‑facing products.

Reid also faults a rollup‑centric roadmap for reducing fee revenue on the base layer. He notes that EIP‑4844, implemented in March 2024, pushed blob fees near 1 wei through much of 2024 and 2025. Quarterly transaction fee revenue for Ethereum has fallen roughly 95% from a Q4 2021 peak of $4.3 billion, and Layer‑2 projects now capture a large share of transaction activity and fees.

On economics, Reid points to published operating margins for some rollups in the 90% to 98% range. He says by mid‑2025 one major rollup had captured close to 70% of rollup profits. Several large Layer‑2 projects issued tokens, which Reid says fragmented capital flows inside the Ethereum ecosystem. He contrasts those outcomes with a more integrated layer‑1 model where fee capture accrues more directly to the native token.

Reid rejects the view that ether’s weaker valuation is solely a product of market cycles or coordination problems. He assigns missed product launches and strategic choices to named people and dates in his critique and says the future path of the ETH/BTC ratio will depend on whether the Foundation changes its product cadence.