Legendary Cyberphunk Nick Szabo and Ryan Watkins, co-founders of Syncracy Capital, laid out a conflicting framework for understanding the Ethereum rally and its valuation dynamics in their post on X.
Ethereum price has nothing to do with utility
Szabo’s core argument is a tough one. “The fundamental problem with ETH’s valuation is that Ethereum’s primary use case is largely external to ETH’s market value.” In his view, Ethereum “could be very useful,” and its applications “could collect significant returns,” but “ETH is still underpriced or vice versa, but there is little link between them.”
He contrasts this with Bitcoin, whose “primary use case is a store of value, which is strongly linked to price,” and says, “Bitcoin’s basic design is much better suited to this use case, so ETH cannot imitate it.”
Szabo’s statement, which returned to the X in late September 2025 after a five-year absence, came in response to Watkins’ A. Researchers come at the market from the opposite angle, arguing that prices and narratives do the heavy lifting while investors routinely over-engineer layer-1 valuation models. “Time and time again, people overthink the valuation of L1,” he wrote, framing the last leg of ETH strength as a narrative pivot rather than a spreadsheet breakthrough.
Why has the ETH price tripled since April?
“The only difference between $1,400 and $5,000 ETH was Bitmine.” In April, he says, “Ethereum was a dying platform.” Today, “it’s a stubcoin chain and an opportunity for the next “Bitcoin-like” institution. ” The lesson he depicts is blunt: “Price guides the story.
Importantly, Watkins does not claim that these stories are justified. He emphasizes the vacuum they filled. “The point here is not about whether any of this is justified. The point is that the lack of an agreed evaluation methodology creates a vacuum that only narrative and relative frameworks can fill.”
He floats the competing bull case not as a belief, but as an open hypothesis.
That uncertainty is pushing the market to lock in simple comparisons and flows, he says. “So what happens if the market instead fixates on relative value and narrative? Metrics.”
He dismisses these as “stupid” exercises, but they are useful for navigation. “We can theorize all we want, or we can navigate the environment in front of us” until the fundamentals reaffirm “don’t overthink it.” With his closing line, he clearly defines the edge. “Assets that penetrate mainstream consciousness and persist over time have a huge competitive advantage. It’s a game of flow and storytelling until the party stops.”
Both views can be true at once. While the market may continue to price ETH primarily through narrative and relative value, the question Szabo raises (whether Ethereum’s design is such that there is a hard durable link between network utility and token value) remains unanswered. For now, the debate itself is a signal. ETH is moving through a cycle where recognition of purpose, as well as measurable cash flow analogs, sets the tone.
At press time, ETH was trading at $4,701.92.
Featured image created by dall.e, chart from tradingview.com
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