Duo Abandon Ethereum in Favor of Bitcoin, Labeling Ethereum as 'Meme Token-Like'
In Brief
- Algorithmic trading firm Two Prime successively bails out Ethereum, branding it "statistically broken."
- Ethereum is trading below $1,850, experiencing a 51% year-to-date drop, while Bitcoin is surging near its all-time high and accumulating over $115B in ETF assets.
- The firm attributes Solana's appeal and Ethereum's leadership stagnation as the driving forces behind their departure, stating Ethereum has lost focus.
Two Prime Ditches Ethereum for Memecoin Memes
Last Thursday, algorithmic trading firm Two Prime sulked the exit doors of Ethereum (ETH) as it staked its future on Bitcoin (BTC) exclusively. In a scathing statement, the firm, an SEC-registered investment advisor, declared Ethereum a write-off, claiming its relentless plunge since the 2024 U.S. elections, contrasting with Bitcoin's resurgence, painted a scary picture of a market rift far too wide to ignore.
Two Prime didn't mince words about their Ethereum exposure before the switch. However, they painted a grim picture of ETH, dubbing its unpredictable behavior, waning momentum, and eroding institutional appeal as deal-breakers.
The firm claimed to have lent over $1.5 billion against BTC and ETH in the past 15 months. Yet, they maintained that the risk-reward profile of ETH had vanished into thin air, making it an unjustifiable investment.
"ETH's statistical trading behavior, value proposition, and community culture have failed beyond a point that is worth engaging," the statement said. "It trades now like a meme coin rather than a predictable asset."
CEO Alexander Blume, in his own words, confirmed that "Two Prime is done with ETH."
Currently, Ethereum is hovering around $1,833, indicative of a 51% year-to-date decline. In contrast, Bitcoin is cruising near $97,000 after a 2.7% gain since the start of the year. BTC remains 11% shy of its all-time high, as per CoinGecko data.
Predictors on the Myriad prediction market remain unconvinced about the short-term prospects of Ethereum. At the time of publication, they pointed to an 82% likelihood that ETH will trade below $1,900 by Sunday night, suggesting that institutional and retail confidence remains stubbornly cautious.
Market Musings
Data from CoinGlass shows that BTC ETFs have accumulated over $115B in assets, making up 5.76% of the total Bitcoin supply, while Ethereum ETFs manage a modest $6.68B, with inflows dwindling since approval.
Two Prime was critical of Ethereum's direction and flagged blockchains like Solana as more appealing for developers and users, offering superior speed, cost, and user experience. The firm argued that Ethereum's Layer-2s had cannibalized the mainnet's value, leaving it without a clear monetization strategy.
"ETH became a victim of its early success... slow processes, mission creep, and no single thing being done particularly well," the firm concluded. In contrast, Bitcoin, Two Prime noted, "stands alone in its use case," offering a predictability and scale that Ethereum can no longer emulate.
Foundation Shakeups
In related news, the Ethereum Foundation appointed two co-directors, Hsiao-Wei Wang and Tomasz Stanatówicz, in March, with the intention to distribute technical and operational responsibilities at the highest level. The Foundation stated the move aims to help Ethereum transition from a fledgling project to a robust base layer of global finance.
Daily Debrief Newsletter
- Two Prime, a SEC-registered investment advisor, has moved its focus exclusively to Bitcoin (BTC), abandoning Ethereum (ETH) due to what they perceive as ETH's unpredictable behavior, waning momentum, and eroding institutional appeal.
- In a recent statement, Two Prime claimed that Ethereum's statistical trading behavior, value proposition, and community culture have failed to a point that is unworthy of engagement, likening its current state to that of a meme coin.
- The shift in emphasis has been mirrored in the investment world, with BTC ETFs accumulating over $115B in assets, making up 5.76% of the total Bitcoin supply, while Ethereum ETFs manage a modest $6.68B, with inflows dwindling since approval.
- Two Prime also criticized Ethereum's direction and flagged blockchains like Solana as more appealing for developers and users, offering superior speed, cost, and user experience. The firm argues that Ethereum's Layer-2s have cannibalized the mainnet's value, leaving it without a clear monetization strategy.
- In an effort to transition Ethereum from a fledgling project to a robust base layer of global finance, the Ethereum Foundation appointed two co-directors, Hsiao-Wei Wang and Tomasz Stanatówicz, in March, with the intention to distribute technical and operational responsibilities at the highest level.
