Ethereum has fallen below $2,000 for the first time since March, with the token down more than 5% over the past 24 hours and nearly 8% in the last seven days. At the same time, ETH futures open interest rose for a third straight day to a record 16.39 million ETH, or about $32.5 billion in notional value. When price declines while open interest keeps rising, the setup is often read as fresh leveraged positioning rather than simple liquidation.
Higher Treasury yields are pressuring the staking case
10x Research founder Markus Thielen said more investors are walking away from ETH. His argument centers on relative returns: ETH does not generate cash flow, and staking yields look less attractive as US government bond yields remain elevated.
The US 10-year Treasury yield is holding above 4.6%, while ETH staking yields are around 2.5% on an annualized basis. That gap matters for institutions weighing risk-adjusted returns. Holding Treasuries offers higher yield with far lower volatility and no smart contract exposure. Fund flows are moving in that direction as well. US spot ETH ETFs have seen $401 million in net outflows this month, fully reversing April’s $354 million in net inflows, and had logged at least 10 straight trading days of outflows as of May 22.
The “ETH as money” thesis is being repriced
Bankless co-founder David Hoffman said publicly on May 26 that he had exited his entire ETH position. He had previously said 99% of his personal assets were allocated to Ethereum, so the shift drew immediate attention.
His position was not a rejection of the Ethereum network itself. Instead, he questioned whether ecosystem growth can still flow back to the ETH token. In his view, the “ETH is money” thesis has not failed; it has already been fully priced in. House of Chimera made a similar point, arguing that the market is now questioning whether Ethereum’s lead in DeFi, RWA, and tokenization can translate into durable token value. Under the current scaling model, rollups capture execution and applications capture user-side profits, while Ethereum mainly provides settlement and security at lower cost. That structure may support decentralization, but it also raises concerns about value leakage from the token.
Staff departures add to pressure as shorts build
The report also pointed to internal strain. Since February, the Ethereum Foundation has seen more than 7 core members or senior contributors leave, including Protocol research co-lead Alex Stokes taking leave, Josh Stark departing after contributing to major upgrades including The Merge, and Protocol Guild coordinator Trent Van Epps leaving as well.
In derivatives, the combination of falling spot prices and rising open interest usually suggests new short positions are being added. Traders are watching $1,980 as a near-term support area. If that level breaks, the next zone in focus is $1,800 to $1,850. On the upside, if ETH can reclaim $2,000, the first resistance band sits around $2,100 to $2,150. With open interest already at a record, any sharp reversal could trigger a large round of short liquidations.