The Ethereum Doomsday Scenario: Inside The Bank Of Italy’s Crisis Simulation

The Bank of Italy ran a technical analysis that asks a stark question: What happens if Ethereum (ETH) falls to zero and stays there?

The note warns that if a native token loses most of its market value and the drop remains persistent, the economic incentives that keep validators running could vanish. Validators might exit, the paper says, and that could make settlement slow or stop.

As a result, transaction settlement could slow dramatically or, in extreme cases, halt. The paper also highlights that other assets using the chain — for example, tokenized securities or fully backed stablecoins — could become hard to move or could face security problems if the network’s defenses weaken.

Italy’s broader regulators have recently stepped up their look at crypto risks. Reports show the Economy Ministry ordered a review of safeguards, and the Bank of Italy’s paper fits into that wider push to quantify risks tied to new payment systems.

Any mitigation would rely on voluntary action by validators, major staking firms, or protocol changes proposed and adopted by the community. That uncertainty is the main policy concern.

The Bank of Italy’s note is a technical, measured look at a worst-case scenario. It uses concrete data to argue that a collapse in Ethereum market value would not only hit holders but could also impair the functioning of systems that now run on Ethereum.

Featured image from Gemini, chart from TradingView