Insider Reveals Real Reason Ethereum Is Down 65% vs Bitcoin Since The Merge

A pointed critique from inside Ethereum’s developer ranks argues that ether’s 65% slide against Bitcoin (BTC) since the Merge stems from specific execution failures at the Ethereum Foundation, not from broad market cycles or coordination problems.

Reid, an ICO-era participant who still builds on Ethereum (ETH), published the indictment, framing the underperformance as accumulated execution debt with names, dates, and missed product calls.

A 65% Drop With Names Attached

Reid’s central data point lines up with public market data. The ETH/BTC ratio peaked near 0.085 around the Merge in September 2022.

It has fallen to roughly 0.028 by late May, capturing ether’s underperformance against Bitcoin. Ether currently trades below $2,000, down 21% over the past year.

Ethereum to Bitcoin Ratio. Source: Longterm Trends

Reid rejects Bankless co-founder David Hoffman’s framing of ether’s “deserved cap” as a noble ceiling. He argues the cap sits lower than bulls expected, for reasons with names and dates rather than coordination theory.

Reid covers credit and real-world assets at firms including Figure and Securitize, and discloses he is still long ether.

ESG Marketing and a Missing Staking Interface

Reid argues the Merge’s 99.95% energy-reduction message answered questions capital allocators never asked.

Institutions wanted yield, developers wanted finality, and users wanted cheaper transactions. Solana sold raw speed during the same window.

Proof-of-stake sat on the roadmap from 2015 and took seven years to ship. Solana launched mainnet beta in March 2020 and shipped wallets, decentralized exchanges, and money markets while Ethereum debated specs.

Vitalik Buterin’s writing through 2024 and 2025 shifted from Casper specs toward pluralism and network states.

Reid reads that tone as an established Ethereum cultural posture rather than an active competitive one.

The smoking gun, in Reid’s read, is the absence of a first-party staking app three years after the Merge.

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

“‘We don’t pick winners’ is what an organization says when it does not want to compete,” Reid remarked.

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Rollups as Managed Decline

The rollup-centric roadmap drained the base layer. EIP-4844 went live in March 2024 and pushed blob fees near 1 wei through most of 2024 and 2025.

Ethereum’s quarterly transaction fee revenue has fallen roughly 95% from a Q4 2021 peak of $4.3 billion.

Ethereum Transaction Fee Since 2021. Source: Token Terminal

Arbitrum has marketed 90% to 98% operating margins on its L2s. Base captured close to 70% of rollup profits by mid-2025.

Every major L2 issued its own token, fragmenting capital flows inside the ecosystem.

Reid contrasts this with Solana’s integrated L1, which has shown fee capture accruing directly to its native token.

The remaining question is whether Foundation product cadence shifts. The ETH/BTC ratio’s path through the rest of the cycle will reflect the answer.