Two Prime Ceases Ethereum Exposure
Algorithmic trading firm Two Prime announced on Thursday that it is dropping all exposure to Ethereum (ETH).
The SEC-registered investment advisor stated it will exclusively manage and lend against Bitcoin (BTC) going forward.
Two Prime cited Ethereum’s unpredictable behavior, declining market momentum, and eroding institutional appeal as reasons for the decision.
The firm did not specify the amount of its previous ETH exposure but noted it lent over $1.5 billion against BTC and ETH in the past 15 months.
Firm Cites Performance and Behavior Concerns
Two Prime described Ethereum as “statistically broken,” stating its risk-reward profile has become “unjustifiable.”
The firm’s statement said, “ETH’s statistical trading behavior, value proposition, and community culture have failed beyond a point that is worth engaging.”
It added, “It trades now like a meme coin rather than a predictable asset.”
Two Prime pointed to ETH’s price performance since the 2024 U.S. elections, contrasting its slump with Bitcoin’s rebound.
CEO Alexander Blume declared, “Two Prime has concluded its relationship with ETH.”
At the time of the report, ETH traded around $1,833 (down ~51% YTD), while BTC traded near $97,000.
Market Data Comparisons
The announcement highlighted data showing BTC ETFs hold over $115 billion in assets, while Ethereum ETFs manage around $6.68 billion, with slowing inflows.
Prediction markets also showed skepticism about ETH’s short-term price potential.
Strategic Criticisms of Ethereum
Beyond market data, Two Prime criticized Ethereum’s strategic direction.
The firm mentioned that blockchains like Solana offer better speed, lower costs, and an improved user experience for both developers and users.
It argued Ethereum’s Layer-2 solutions have “cannibalized the mainnet’s value” without a clear monetization strategy.
Two Prime described ETH as suffering from “slow processes, mission creep, and no single thing being done particularly well.”
Bitcoin Viewed Favorably
In contrast, Two Prime noted Bitcoin “stands alone in its use case,” offering predictability and scale.
The firm concluded by suggesting Ethereum’s leadership seems unaware of these issues.
Ethereum Foundation Leadership Change
Separately, in March, the Ethereum Foundation appointed Hsiao-Wei Wang and Tomasz Stańczak as co-directors.
The Foundation stated this change aimed to help Ethereum mature as a base layer for finance.
Also Read: Celo Evolves into Ethereum Layer-2 Network Utilizing Optimism Rollup
