What if Ethereum Goes to Zero? [The Terrifying Truth]

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My name is Guy and if you're seeking unbiased in-depth information about Bitcoin,

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Ethereum is the second largest cryptocurrency on the planet.

That's because its robust smart contracts and track record

have made it the top chain for things like DeFi, stablecoins,

and tokenized RWA's. But what happens to these assets and services

if ETH were to go to zero? Well, a recent report analyzes exactly that,

and it's safe to say that the answer is terrifying.

That's why today we'll break down this report for you in simple terms

and reveal to just how worried you should be about this possibility.

My name is Guy and you're watching the Coin Bureau.

Before we begin though, I'm not a financial advisor,

and nothing in this video is financial or investment advice.

It's educational content intended to inform you about a recent Ethereum-focused report.

So if that sounds good, punch that like button.

So the report we'll be summarizing today is titled, quote,

what if Ether goes to zero? How market risk becomes infrastructure risk in crypto?

It was recently published by the Italian Central Bank

and we'll be giving you the key highlights right here in this video.

We'll also leave a link to the full report down in the description if you're interested.

Now, the report starts by looking at the economic incentives behind

permissionless blockchains, that is, crypto blockchains.

They're called permissionless because anyone can become a validator helping to secure

the network and earn rewards. Nothing you don't already know.

One of the biggest crypto blockchains is of course Ethereum, which launched in 2015.

Now, Ethereum's launch marked a major turning point for crypto after Bitcoin's 2009 debut.

Just like with Bitcoin, users can use Ethereum to send the chain's native currency,

in this case, ETH, but Ethereum's smart contracts let you do much more.

These smart contracts make it possible to create decentralized applications,

which is why Ethereum is often referred to as a world computer.

These decentralized applications make it possible to provide financial services

without any intermediaries, which is truly revolutionary.

In any case, the report goes over a few key Ethereum statistics.

The report's author's note that there are over 1.7 million tokens on Ethereum alone.

In turn, the Ethereum blockchain that hosts these tokens is powered by over 10,000 nodes

in more than 30 countries.

In this context, a node is a computer that hosts a copy of the blockchain.

In other words, nodes simply store the history of all the transactions on the blockchain.

Now, the actual processing of transactions is done by validators,

and there are close to 1 million validators on Ethereum.

Now, the report notes that there are three ways validators can earn ETH.

First, newly minted ETH from block rewards.

Second, ETH from gas aka transaction fees.

And third, by ordering transactions on Ethereum strategically,

in order to maximize their rewards, a process called

Maximum Extractable Value or MEV.

Together, these incentivize validators to join the Ethereum blockchain.

As some of you will know, Ethereum validators need between 32 and 2048 ETH to operate.

This ETH is staked, and validators monitor each other for suspicious activity.

If a bad actor is caught, their stake is slashed and burned, resulting in a financial penalty.

So, this system deters misconduct, though malicious validators could still cause damage

if enough of them were to collude.

That said, though, a bad actor would need over 50% of the validator network,

known as a 51% attack, which thankfully is practically impossible.

The report notes that this would require at least 17 million ETH,

costing over $56 billion at today's prices.

In short, it ain't going to happen.

The report references LIDO finance, though, as a case study of validator concentration,

since its validators account for a quarter of all staked ETH.

The report then provides a chart of LIDO's profitability from January 2023 to July 2025.

During that period, LIDO's APR fell from a 9% peak to just 3%,

as network congestion eased and competition among validators increased.

Logically, staking long-term for a 3% yield isn't very exciting,

especially since that 3% isn't guaranteed.

That said, though, ETH's price has risen steadily since January 2023,

so anyone who bought and staked ETH during that time is sitting on some impressive gains.

And this ties nicely into the second part of the report, which examines how ETH's price affects

validator activity. Since Ethereum's launch in 2015, there have been countless catalysts that

have pushed ETH's price up or down. That's why it's important to keep up with the headlines for

anything that can impact the crypto market. This can be a lot of work, but it doesn't have to be.

You can easily stay up to date by getting our weekly newsletter sent directly to your inbox.

That's where our research team aggregates the biggest stories to tell you what

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And now, back to the report, which notes that, in 2015, ETH was trading between $0.50

and $2, and if you're wishing you had a time machine right now, you're not alone.

Anyhow, ETH hit an all-time high in November 2021, though it slightly surpassed that

in August 2025, peaking just under $5,000 in both cases.

Even after the 2021 high, though, ETH fell below $1,000 during the bear market.

Despite this volatility, though, the number of Ethereum validators has steadily risen,

which the report attributes to two main reasons, which go hand in hand.

First, it notes that so-called unbacked cryptos, like Ethereum, are, quote,

driven mostly by investor confidence, since there are no traditional fundamentals to anger the price.

Second, whenever the validator pool shrinks, staking rewards rise.

Higher rewards attract new validators, keeping validator growth relatively stable,

so long as ETH's price increases over time.

But here is where things get interesting.

The report notes that even a drop in ETH's price likely won't result in a massive validator

exodus. That's simply because even during bearish market conditions, validators and investors

still have confidence that ETH will recover eventually. But what if this confidence was no longer

there? Well, here, the report poses a few possible triggers that could cause a loss of confidence

in Ethereum. These include internal problems, such as Ethereum's governance,

resulting in slow progress or even regression. Another possibility, meanwhile,

is if there's a massive loss in confidence in Bitcoin or the broader crypto industry.

Alternatively, a rival blockchain could emerge that clearly outperforms Ethereum across every

possible metric, including scalability, speed, cost, and reliability. Outside of crypto,

another reason why investors and validators could lose faith in Ethereum is if there are major

macro shocks like escalating global conflicts, or if another technology is developed that turns out

to be even more effective than blockchain. The worst part is that any of these factors

could trigger a chain reaction, pun intended, further eroding confidence in Ethereum.

For example, a major macro shock like a war could make BTC fall short of expectations,

shaking trust in crypto as a whole. Meanwhile, other sectors, like AI, might outperform crypto,

prompting investors to shift capital there for higher returns. In all these scenarios,

the belief that ETH's price will keep rising over the long run would be shaken,

and some would argue we're not far off from that now. If things get really bad,

the only one still standing would be long-term believers in crypto's potential.

At the same time, those in it for the gains rather than the tech will likely move elsewhere,

including a huge number of Ethereum validators. And this brings us to the next part of the report,

which asks the pressing question, what happens on the way down?

Well, if ETH's price starts plummeting, but there's no confidence it will recover,

the most obvious outcome is that validators would race to unstake their ETH in order to sell it.

Not only would this crash ETH's price even more, but it would also result in far fewer validators

in the short term. In the report's words, quote,

no validators means that the network does not work anymore.

Users could keep on submitting transactions, but those would never be settled.

Assets would still live on chain, but they would be immovable.

Now to clarify, the report points out that this process would be gradual,

thanks to unstaking periods, but Ethereum security could be hit immediately nonetheless.

That's because cheaper ETH makes it easier to gain enough power to run malicious

validators, and with more honest validators going offline, attacking the network becomes far

easier. Notably, though, ETH wouldn't be the primary target in this scenario because it would

quickly become worthless. Instead, attackers would focus on other major assets likely less affected

by Ethereum's collapse, like stablecoins and tokenized real-world assets or RWA's,

especially if issuers are legally required to redeem them at face value.

Anyway, the report notes that if something like this happened,

Ethereum's future would hinge on investor confidence in the aftermath.

There's no way to know exactly how it would play out, but the crypto industry has repeatedly

shown an incredible ability to pick itself up, dust itself down, and carry on moving forward.

Then again, the crypto industry has never seen the failure of truly core infrastructure before.

Sure, we've had major collapses like Mt. Gox, FTX, and the Teriluna debacle,

but since so much of the industry runs on Ethereum, a breakdown there would make those failures

look like merely a bad day at Disneyland. The report reiterates, though, that there are mitigation

strategies in place, but even they have limits. The first is the unstaking process I mentioned earlier.

Normally, unstaking takes about 28 hours, but this period lengthens as more validators join the queue,

since there's a daily withdrawal limit. In fact, in September 2024,

the execute hit its longest ever at around 46 days, almost seven weeks. Crazy, right?

Still, this system buys Ethereum some time, helping to limit the impact on network security,

availability, and eth's price. However, network participants would need to use this time wisely,

acting quickly to prevent further damage. Castodians, issuers, and holders would have to

cooperate, rather than follow their own self-interest, to stop the Ethereum blockchain from descending

into chaos. And let's be real, the chances of widespread cooperation in that scenario are about

as likely as Nick revealing himself as Satoshi Nakamoto. Newsflash, he isn't. At least, not that I know

of. But let's say everyone did agree to cooperate. The safest way to avoid the impact of Ethereum's

impending collapse would be to bridge assets to another blockchain before the attack.

But even then, three problems with a rise. First, bridges are notorious for their smart contract

vulnerabilities, with many having been hacked or exploited. On top of that, these smart contracts

might not handle such a massive capital shift. Second, coordinating market participants isn't a simple

ascending a quick message. Ethereum is highly decentralized, with users worldwide across different

time zones speaking multiple languages. Getting everyone to act in unison would be an insane

challenge on its own. And third, over $75 billion is locked in DeFi protocols at the time of

shooting this video, many with unique governance rules that determine how quickly ETH can be withdrawn.

As an alternative, some whales, exchanges, and stablecoin issuers could try to intervene to

support ETH's price, sort of like a safety net. But, as the report notes, even this would be

faced with problems, especially if the confidence crisis was caused by Ethereum being inferior to

another blockchain, or if problems can't be fixed quickly. Okay, then, now that we've covered

what could happen on the way down, the question now is what would happen if Ethereum were to hit

rock bottom and ETH were to go to zero? Well, the report notes that one possible outcome is that

ETH suffers a staggered fall from grace, with a few partial recoveries here and there. It explains

that the Ethereum Foundation, the nonprofit guiding Ethereum's development, along with large

corporate stakers, could buy enough ETH to keep validators running. This would keep the network

operational for weeks or even months. However, this wouldn't restore investor confidence, and many

would still sell their ETH, likely at significant losses. Not to mention that Ethereum would become

extremely centralized. The report also notes that if whales, exchanges, and token issuers moved assets

cross-chain, it wouldn't happen instantly. During the process, the bridges they use would be prime

targets for hackers. In fact, sustained attacks could even cause tokenized RWA's to DPEG,

think stablecoins dropping well below $1, or tokenized real estate trading far below its real

world value. And of course, the money locked in DeFi protocols would be pretty much wiped out,

either due to sudden withdrawals, or the massive liquidations of projects or investors that took

out leverage positions. Now, in the event that a 51% attack were indeed to happen,

the first line of defense would be to freeze assets on chain. This is something that centralized

stablecoin issue was already due, and you can learn more about that in the video right over here.

The report notes, this could help prevent malicious activity like double spending, where an

attacker tricks the blockchain into accepting the same transaction twice. That said though,

freezing assets would be highly controversial and would only further erode confidence,

causing even more long-term damage. And as a final measure, the Ethereum foundation could

intervene with a hard fork. This would reverse illicit transactions, but would also signal defeat,

likely driving investors away to alternative chains without the same issues.

So, to wrap up, the report notes that while Ethereum is used as its main example,

these risks apply to any permissionless blockchain with its own token ecosystem,

whether that's Solana, Tron, BNB Chain, or many others. But because Ethereum has the

second largest market cap and is the largest ecosystem in crypto, it's collapse would cause

the most damage. For policy makers though, the picture isn't so clear.

Some tradfi players lean towards permission chains, where only approved players can run

validators and unbacked cryptos aren't involved. This makes regulatory compliance easier,

but these systems are more expensive than public chains like Ethereum. However, the report adds that

while permissionless chains can be steered by groups like the Ethereum foundation,

they are decentralized by nature and therefore not ideal for tradfi infrastructure.

Moreover, they add that central banks can't be expected to prop up cryptos issued on these

chains. Recall that this report was written by Italy's central bank, and with that we've reached

the end of this report and will remind you that you can find the whole thing in the description

below. For now though, you're probably wondering how likely it is that ETH could, in fact,

go to zero. Well, the short answer is not very likely at all. While the report raises multiple

concerns worth considering, they're honestly overblown. As mentioned earlier, attacking a

major chain like Ethereum would require a bad actor to control over 50% of the network.

This would cost billions of dollars in ETH alone, not to mention the costs for the hardware needed

to pull it off. This is why decentralization is such a powerful security measure, and Ethereum

just so happens to be one of the most decentralized blockchains in the world, second only to Bitcoin.

In short, malicious validators aren't breaking Ethereum anytime soon.

You may also be wondering if a competing chain like Solana could overtake Ethereum with its

speed and efficiency, but there are three major obstacles here. First, Solana has a spotty track

record for going offline. Second, it doesn't dominate key corners of the crypto industry like Ethereum

does, and third, and perhaps most importantly, Solana's speed comes at the cost of decentralization.

That's not to say that Solana is centralized per se, but it's not as decentralized as Ethereum.

Solana has a few thousand active validators while Ethereum has almost a million active validators

at the time of shooting. That is a huge difference. Not only that, but investor and validator

confidence in Ethereum is actually incredibly strong at least in recent months. Case in point,

Ethereum's validator execute recently hit zero, which literally means no validators are going

offline. At the same time, demand for ETH staking has sort. If that doesn't spell confidence,

then well, I don't know what does. In fact, this confidence shows up in the charts too. Sure,

the October 2025 liquidations cut ETH's rally short, but ETH has nonetheless been hitting

high lows since the spring. And indeed, ETH has been on an uptrend on its BTC pair since April

last year, and maybe about to break a major resistance zone. With Bitcoin dominance gradually

declining since June 2025, this suggests capital is rotating into ETH, albeit gradually.

And most importantly, institutions are desperate to tokenize their real world assets,

but to do this, they want the most reliable, secure, and liquid smart contract blockchain.

It's no wonder, then, that Ethereum hosts the lion's share of RWA's. And as Ethereum rolls out

major hard fork upgrades like the recent Fusaka upgrade and the upcoming Glamster Dam,

it becomes an even more attractive option for institutional and retail investors alike.

And by the way, you can learn more about those upgrades in the video right over here.

Now, I could go on, but I think you get the point. Ethereum isn't going to zero today,

tomorrow, or anytime soon. In fact, it seems to be doing the opposite. With every upgrade and

development, Ethereum grows stronger, and it's only a matter of time before ETH's price reflects

this. So yes, this report was definitely worth the read, and yes, the scenarios are possible,

hypothetically at any rate. In practice, though, it's probably best to take this report with a huge,

and I mean huge grain of salt. Okay, folks, that's enough from me, though.

Now it's time to hear from you. Are you worried about Ethereum's future, or are you stacking ETH

as we speak? Let us know in the comments below. If you're wondering where all the retail investors are,

then check out the video over here. And if you're wondering which crypto narratives you should be

watching closely in 2026, well, you can find out in this video right over here. Okay, thank you all

for watching, and I'll see you again soon. This is Guy, signing off.

Hello, Guy again. Before you go, if you have a moment, please do rate and review us.

It really helps the podcast grow and find new listeners. Okay, that's all for this episode.

Thank you for listening, and see you again soon.