Summary
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Two Prime Drops ETH for BTC: US investment advisor Two Prime ceased support for Ether (ETH), shifting to a Bitcoin-only strategy for lending and asset management, citing ETH’s poor performance (-45% YTD) and changed market behavior.
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ETH Criticized as Unpredictable: The firm labeled ETH’s trading as “memecoin-like” and “no longer predictable,” arguing its risk-reward is unjustifiable compared to Bitcoin’s more stable behavior, making it difficult for algorithmic trading and lending.
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Community Reaction and ETF Context: While some in the crypto community dismissed the firm or saw the negative stance as a potential bottom signal for ETH, Two Prime highlighted the significant underperformance of ETH ETFs compared to BTC ETFs as further justification for their move.
Two Prime Shifts to Bitcoin-Only Strategy
Amid Ether’s challenging price performance in early 2025, US-based investment advisory firm Two Prime has announced it will cease support for ETH, adopting a strategy focused exclusively on Bitcoin.
Having facilitated $1.5 billion in loans backed by both Bitcoin (BTC) and Ether (ETH) over the previous 15 months, the SEC-registered firm declared on May 1st its decision to concentrate solely on BTC for asset management and lending moving forward.
Concerns Over Predictability and Value
Two Prime stated that “ETH’s statistical trading behavior, value proposition, and community culture have failed beyond a point that is worth engaging.”
This move coincides with ETH losing approximately 45% of its value year-to-date, although some market watchers speculate a price bottom and trend reversal could be imminent.
Emphasizing a data-driven approach inherent to algorithmic trading, Two Prime asserted that available information indicates “ETH has fundamentally changed.”
The firm argued that Ether no longer trades predictably and has diverged negatively from Bitcoin’s behavior.
“It trades now like a memecoin rather than a predictable asset,” the statement contended, noting that ETH exhibited multiple significant deviations from expected patterns during Q1 2025, unlike Bitcoin, which remained within its typical behavioral range despite market turbulence.
Two Prime said that this unpredictability makes it harder to create algorithmic trading strategies and assess risks for ETH-collateralized lending, going beyond the usual high volatility seen in digital asset markets.
Founded in 2019 by Alexander Blum and Marc Fleury, Two Prime has offered services involving both BTC and ETH for six years.
Community Response: Contrarian Indicator?
The firm’s sharp critique of Ethereum elicited swift responses from the cryptocurrency community.
Many observers interpreted the strongly negative announcement as a potential contrarian signal, suggesting ETH might be nearing a price floor.
Comments on social media included dismissals of the firm’s relevance (“Never even heard of them”) and criticisms of the statement itself (“What a retarded essay statement,” referencing volatility in traditional markets like the S&P 500 for comparison).
Others directly speculated, “If this isn’t a bottom signal for ETH I don’t know what is,” reflecting anticipation of an upward correction.
ETF Performance and Wider Market Moves
Two Prime bolstered its argument by highlighting the underperformance of Ether exchange-traded funds (ETFs) relative to their Bitcoin counterparts, stating that BTC ETF acquisitions have surpassed ETH buying by nearly 24 times.
The firm suggested this disparity creates a “reflexive loop,” where lower demand leads institutions like BlackRock to allocate fewer resources towards promoting ETH products, resulting in BTC gaining mainstream traction while ETH struggles.
Despite lagging behind Bitcoin ETFs launched around the same time (following SEC approval in May 2024), Ether-based exchange-traded products (ETPs) still command significant assets.
Recent data from CoinShares showed Ether ETPs held roughly “$9.2 billion in assets under management (AUM), substantially more than Solana” (1.4 billion) and XRP ($1 billion), making ETH the largest altcoin in the crypto ETP space.
Nonetheless, perceived low investor interest has prompted some issuers to adjust their ETH product offerings.
VanEck halted trading on its futures Ether ETF, WisdomTree withdrew a proposal for an Ethereum Trust ETF in late 2024, and ARK liquidated its futures ETFs for both ETH and BTC in March 2025.
Also Read: Two Prime Leaves Ethereum for Bitcoin Due to ‘Meme Coin’ Behavior
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