PlanB Slams Ethereum as ETH Price and Dominance Drop to Multi-Year Lows

PlanB, a well-known Bitcoin analyst famous for the Stock-to-Flow (S2F) model, recently criticized Ethereum as ETH's price and dominance have dropped significantly

PlanB, a well-known Bitcoin analyst famous for the Stock-to-Flow (S2F) model, recently expressed criticism towards Ethereum as the token’s price and market dominance have fallen significantly since the beginning of the year.

The criticism raises doubts about Ethereum, the second-largest cryptocurrency, focusing on its core mechanisms, particularly the use of Proof of Stake (PoS) instead of Proof of Work (PoW).

Why Does PlanB Call Ethereum ‘Centralized’ and ‘Pre-Mined’?

PlanB referenced an old post by Vitalik Buterin from 2022, in which Buterin criticized the Stock-to-Flow model for creating a “false sense of certainty” regarding Bitcoin’s price. Seizing this opportunity, PlanB decided to mock Ethereum, highlighting the fact that the ETH/BTC trading pair had reached a nine-year low.

“I know it’s impolite to gloat and all that, but I think shitcoins like ETH, that are centralized & premined, have PoS instead of PoW, switch supply schedule at will, are harmful and deserve all the mockery they get,” PlanB stated.

PlanB isn't the only one holding this opinion. As Ethereum transitioned to PoS through "The Merge," its energy consumption decreased by over 99%. However, some experts like Meltem Demirors, executive at Crucible Capital, believe this move might have ultimately decreased the network’s long-term value.

Describing it as a trillion-dollar mistake, Demirors argues that it will dilute Ethereum’s core network and stall innovation in GPU hardware.

In addition to PoS criticism, PlanB also brought up Ethereum’s pre-mine controversy as the tokenomics show that developers pre-mined over 72 million ETH in the early stages—about 60% of the circulating supply. This might give a small group excessive control, especially under PoS, where large holders have more influence over transaction validation.

"Premine is really a big red flag but I guess some people just don't care," PlanB added.

This criticism comes as Ethereum's dominance fell to a five-year low and the token's price has decreased nearly 60% since late last year.

However, despite the criticism, analyst Danny Marques highlighted ETH's growing role in real-world applications.

According to a Bitwise report, the Ethereum network processed an enormous amount of stablecoin transactions in 2024, outperforming even Visa. The report shows that stablecoins facilitated nearly $14 trillion in transactions, exceeding Visa's $13 trillion, while ETH-based stablecoin supply comprises over 50% of the total stablecoin supply.

Investor Wise also pointed out that Ethereum hosts 56% of all real-world asset (RWA) value, including stablecoins.

Moreover, investor AllThingsEVM.eth argued that Ethereum is becoming less centralized each year, while Bitcoin is becoming more centralized due to the increasing trend of nation-states and institutions amassing BTC.

"Tell me what happens when nation states are the largest holders of BTC while mining rewards get more and more sparse. Will the network be more decentralized when the US or China is running the majority of miners to 'secure' their stake? Or will BlackRock create its own hard fork when it feels its need to upgrade issuance?" the investor asked.