Bankless Co-Founder Dumps Ethereum for Altcoins Like Zcash, Hyperliquid

Bankless co-founder David Hoffman (@TrustlessState) has sold his entire Ethereum ($ETH) position and immediately redeployed the capital into a basket of altcoins, including VVV, $NEAR, $ZEC, and $HYPE. He also used the remaining proceeds to build a position in LIT.

A Calculated Rotation, Not a Retreat

Hoffman invested approximately 50% of the funds from the sale into VVV, NEAR, ZEC, and HYPE tokens, setting aside the remaining 50% for gradual purchases in the first phase. He then used the remainder of his initial capital to purchase LIT tokens. When asked about his investment thesis for LIT versus HYPE, Hoffman said he believes LIT has a stronger risk-return profile, pointing to a buyback program running at roughly twice the speed of HYPE's, as well as a more advantageous pricing structure, lower latency, and a US-based location.

Hoffman is one of Ethereum's most prominent advocates and had held ETH for nearly nine years before making this move. The decision drew immediate attention across the crypto industry, given his long-standing role as one of the asset's most vocal public supporters.

Why Hoffman Walked Away From $ETH

Hoffman said he sold his ETH after concluding that the "ETH is money" thesis has largely played out, and that he no longer sees a clear path for ETH as an asset to receive a structural rerating. He said Ethereum "earned the market cap that it deserves," but argued that the ecosystem now benefits applications and rollups more directly than ETH holders.

Ethereum, in his view, has deliberately moved toward a structure where value leaks outward. Rollups scale execution, applications capture more of the user-facing margin, and Ethereum provides secure settlement at low cost. Hoffman described this as a feature of Ethereum's ideology and architecture, but a challenge for ETH as an asset.

Hoffman also argued that Ethereum's utility may increasingly strengthen other forms of money. He noted that Ethereum hosted $3 billion in stablecoins in 2020 and $163 billion today, a 54x increase. The network's success as settlement infrastructure has helped expand tokenized dollars, not necessarily ETH's role as money.

Hoffman was clear that he is not bearish on ETH outright. He said he wants to allocate capital elsewhere because he does not expect ETH to be "structurally rerated" higher or lower. The comments arrived during a turbulent period for Bankless. Reports from community members claimed the company quietly laid off most of its staff, while co-founder Ryan Sean Adams described the shift as the end of Bankless' "first era" after six years covering Ethereum, DeFi, and digital assets.

Daily active addresses on Ethereum have trended lower since early February, according to Santiment data, adding an on-chain dimension to Hoffman's broader argument about fading demand for the base layer relative to L2 activity.

Sources:
NewsBTC: Bankless Co-Founder Explains Why He Sold All His Ethereum
BeInCrypto: Why Bankless Co-Founder Sold His Entire Ethereum Portfolio
Crypto Times: Ethereum's 'ETH Is Money' Era Is Over? Bankless Co-Founder Dumps ETH