Nick Szabo: ETH Price Driven by Hype, Not Use Case
Nick Szabo – As Ethereum (ETH) pushes past $4,700, marking one of its best-performing Q3 periods to date and setting the stage for a strong Q4, long-time crypto pioneer Nick Szabo is casting doubt on the connection between Ethereum’s utility and its market value.
Szabo, the computer scientist credited with inventing the concept of smart contracts, believes a “fundamental problem” with Ethereum’s valuation lies in the fact that its use cases are mostly external to its token price. According to Szabo, even if Ethereum-based applications generate substantial revenue, the price of ETH may not reflect that success — and vice versa.
“There is barely any connection between the ETH price and its utility,” Szabo said, emphasizing that the platform’s broad functionality does not inherently drive its market valuation.
Bitcoin’s Store-of-Value Advantage
Szabo contrasted Ethereum with Bitcoin, which he described as having a clear, singular use case: a store of value (SOV). This use case, he argues, is strongly tied to Bitcoin’s price — something Ethereum struggles to replicate.
Because ETH cannot serve as a pure store of value in the same way, it must rely on other narratives and use cases, which often don’t translate into direct price action.
Narrative Over Fundamentals?
Szabo’s comments follow remarks from Ryan Watkins, co-founder of Syncracy Capital, who pointed out that Ethereum’s past surge — from $1,400 to $5,000 — was largely fueled by hype surrounding Tom Lee’s Bitmine project. Watkins summarized the current market dynamic as “a game of flows and narratives until the party stops.”
