Two Prime has completely exited Ethereum, citing its unpredictable nature and a decline in institutional confidence. The firm is now focused solely on Bitcoin, pointing out ETH’s significant price drop and comparing it unfavorably to competitors like Solana. The Ethereum Foundation is also restructuring its leadership to improve its direction amid these challenges.
In a significant shift, the algorithmic trading firm Two Prime has announced it is completely divesting from Ethereum (ETH), labelling the asset as “statistically broken.” The firm pointed to ETH’s erratic performance and a loss of investor confidence, particularly as it has plummeted 51% year-to-date, now trading around $1,850. Meanwhile, Bitcoin (BTC) remains resilient, nearing its all-time high and boasting over $115 billion in cryptocurrency exchange-traded fund (ETF) assets.
Two Prime made this declaration on Thursday, stating that it will focus solely on Bitcoin management and lending going forward. The firm’s decision comes as Ethereum’s market momentum wanes, suggesting it’s become less appealing for institutional investors. Specifically, Two Prime cited its frustration with ETH’s unpredictable behaviour and stagnation in leadership as grounds for abandoning the asset.
While Two Prime did not disclose the amount of ETH in its portfolio prior to this pivot, it made clear its criticism of the cryptocurrency. The SEC-registered firm noted its history, lending over $1.5 billion against both BTC and ETH in the last 15 months. However, they deemed the risk-reward balance for ETH “unjustifiable” at this point.
In their statement, Two Prime claimed, “ETH’s statistical trading behaviour, value proposition, and community culture have failed beyond a point that is worth engaging. It trades now like a meme coin rather than a predictable asset.” This statement highlights its shifting perception of Ethereum’s market dynamics.
Interestingly, since the 2024 U.S. elections, Ethereum has seen a sharp decline in value, while Bitcoin has recovered, signalling a growing divide in the market. CEO Alexander Blume bluntly stated, “Two Prime is done with ETH.” Current data indicates Ethereum is trading at a steep drop from earlier highs and Bitcoin’s price is only about 11% off its peak, meaning investor sentiment has clearly shifted dramatically.
Amid these developments, the Myriad prediction market reflects scepticism regarding Ethereum’s short-term viability. At the time of publication, users predict an 82% chance that ETH will end below $1,900 by the end of the week, indicating weak confidence among institutional and retail traders alike.
Additional statistics show that BTC ETFs command over $115 billion in assets, taking up 5.76% of Bitcoin’s entire supply. In stark contrast, Ethereum ETFs manage only $6.68 billion, with inflows considerably slowing down since they were approved.
Deepening its critique, Two Prime also pointed to competing networks like Solana, which they argue provide a more compelling platform for developers and users — with better speed and cost-effectiveness. They suggested that Ethereum’s own layer-2 solutions have undermined its mainnet, leading to a lack of a clear monetisation strategy. “ETH became a victim of its early success… slow processes and mission creep,” they stated, pointing out that Ethereum struggles to excel at any single aspect.
In comparison, Two Prime underscored Bitcoin’s distinctive position, offering predictability and scalability that Ethereum no longer seems able to match, adding that the Ethereum leadership appears unaware of this shift in the market’s perception.
On a separate note, the Ethereum Foundation has taken steps to bolster its leadership amidst this turmoil. In March, they appointed core researcher Hsiao-Wei Wang and Nethermind CEO Tomasz Stańczak as co-directors. This move aims to distribute technical and operational responsibilities effectively, aiding in the transition of Ethereum from a fledgling project towards a stronger foundational layer for global finance.
