Ethereum Insider Blames Foundation Missteps for ETH’s 65% Decline Against Bitcoin in 2026

A prominent Ethereum developer and ICO-era participant has sparked debate across the crypto industry after arguing that Ether’s (ETH) 65% decline against Bitcoin (BTC) since the 2022 Merge is the result of specific execution failures at the Ethereum Foundation rather than broader market conditions.

Reid, a longtime Ethereum supporter who continues building on the network, recently published a detailed critique highlighting what he describes as years of strategic mistakes, missed opportunities, and slow product execution. Despite his criticism, Reid disclosed that he remains bullish on Ether and continues to hold ETH.

According to market data, the ETH/BTC ratio reached approximately 0.085 following the Ethereum Merge in September 2022. By May 2026, that figure had fallen to around 0.028, reflecting significant underperformance against Bitcoin. Ether is also trading below $2,000, down more than 20% over the past year.

One of Reid’s main criticisms centers on Ethereum’s messaging around the Merge. While the transition to proof-of-stake reduced network energy consumption by 99.95%, he argues that institutional investors were more interested in staking yields, scalability, and user adoption than environmental benefits. During the same period, competing blockchain Solana focused heavily on speed, usability, and ecosystem growth.

Reid also points to Ethereum’s lengthy development cycle. Proof-of-stake was first proposed in 2015 but took seven years to become reality. Meanwhile, Solana launched in 2020 and rapidly expanded its ecosystem with wallets, decentralized exchanges, and lending platforms.

Another concern is Ethereum’s lack of a first-party staking solution. Nearly three years after the Merge, users still need 32 ETH to run a validator or rely on third-party providers. Lido currently controls roughly 24% of all staked ETH, raising concerns about network centralization despite repeated warnings from developers.

Reid further argues that Ethereum’s rollup-centric scaling strategy has weakened the base layer’s economic model. Following the launch of EIP-4844 in 2024, transaction costs on rollups dropped significantly, but Ethereum’s fee revenue also declined sharply. Data shows quarterly transaction fee revenue has fallen roughly 95% from its Q4 2021 peak of $4.3 billion.

At the same time, leading Layer-2 networks such as Arbitrum and Base have captured substantial economic value. Many of these networks launched their own tokens, potentially fragmenting liquidity and investment flows across the Ethereum ecosystem. In contrast, Solana’s integrated Layer-1 model allows more value to accrue directly to its native token.

As Ethereum moves through the current market cycle, investors and developers will be closely watching whether the Ethereum Foundation adjusts its product strategy and execution pace. The future performance of ETH against BTC may ultimately depend on how effectively the network addresses these long-standing concerns.