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Insider Reveals the Real Reason Ethereum Has Fallen 65% Against Bitcoin Since The Merge

A sharp critique from Ethereum developers highlights a 65% decline in ether against Bitcoin
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since the Merge, not due to general market cycles or coordination issues, but because of specific execution failures at the Ethereum Foundation.

Reid, a participant from the ICO era still building on Ethereum
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, published this critique, describing the poor performance as accumulated execution debt by listing names, dates, and missed product decisions.

65% Decline with Named Individuals

Reid’s key data aligns with public market data. The ETH/BTC ratio peaked around 0.085 during the September 2022 Merge.

That value dropped to about 0.028 by the end of May, indicating ether’s performance lagging far behind Bitcoin. Currently, ether trades below $2,000, down 21% over the past year.

Reid rejects co-founder of Bankless, David Hoffman’s, opinion about a “fair cap” for ether as a noble limit. He argues that this cap is set lower than bullish expectations, with concrete reasons including names and dates, not just coordination theories.

Reid discusses credit and real-world assets in companies like Figure and Securitize, and reveals that he still holds ether for the long term.

ESG Marketing and Missing Staking Interfaces

Reid views the 99.95% energy reduction message from the Merge as actually answering questions that big investors never asked.

Institutions seek yields, developers want finality, and users desire cheaper transaction fees. Meanwhile, Solana offers high speed directly.

Proof-of-stake has been on the roadmap since 2015, but it took seven years to fully realize. Meanwhile, Solana launched its mainnet beta in March 2020, immediately offering wallets, decentralized exchanges, and money markets, while Ethereum was still debating technical specifications.

Vitalik Buterin’s writings throughout 2024 and 2025 shift from Casper specifications to a more pluralistic approach discussing network-based states.

For Reid, this tone change reflects Ethereum’s established culture, not an active competitive stance.

The strongest evidence, according to Reid, is the absence of an official Ethereum staking application, even three years after the Merge.

The official path still requires running a validator with at least 32 ETH. Most users go through Lido, which now holds about 24% of staked ETH, despite frequent centralization warnings from developers.

“‘We don’t choose winners’ is an organizational statement that refuses to compete,” Reid explains.

Rollups as a Managed Downturn Phase

A roadmap focused on rollups has drained Ethereum’s base layer. EIP-4844, effective from March 2024, will make blob fees nearly 1 wei throughout 2024 and 2025.

Ethereum’s transaction fee revenue per quarter plummeted about 95% from its peak of $4.3 billion in Q4 2021.

Arbitrum promotes operational margins of 90% to 98% on their layer-2. Base managed to capture nearly 70% of rollup profits by mid-2025.

Each major L2 issues its own token, dispersing capital flows within the ecosystem.

Reid compares this to Solana and integrated layer-1s that successfully accumulate fees directly into their native tokens.

The big remaining question is whether the Foundation’s product rhythm will change going forward. The trajectory of the ETH/BTC ratio for the rest of this cycle will reveal the answer.