Summary
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Two Prime Exits Ethereum: Algorithmic trading firm Two Prime has announced it is eliminating all exposure to Ethereum (ETH), shifting its focus entirely to Bitcoin (BTC) for asset management and lending.
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“Statistically Broken” Criticism: The firm cited Ethereum’s unpredictable trading patterns (likening it to a “meme coin”), declining market momentum, and an “unjustifiable” risk-reward profile as primary reasons for the divestment.
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Strategic Concerns Voiced: The firm also criticized Ethereum’s ecosystem direction, including issues like Layer-2s potentially undermining the mainnet’s value, lack of clear focus, leadership stagnation, and the growing appeal of competitors like Solana.
Complete ETH Divestment Announced
The algorithmic trading company Two Prime has declared its complete withdrawal from all Ethereum (ETH) holdings.
The firm, an SEC-registered investment advisor, stated it will now exclusively manage assets and conduct lending activities against Bitcoin (BTC).
This decision marks a departure for the firm, which reported lending over $1.5 billion against both BTC and ETH within the past 15 months.
Rationale: Market Performance and Unpredictable Behavior
Two Prime outlined several reasons for its decision, criticizing Ethereum’s current state.
The firm described ETH as “statistically broken,” arguing its risk-reward profile has deteriorated to an “unjustifiable” level.
Key concerns included unpredictable trading patterns, declining market momentum, and what the firm perceived as eroding institutional appeal.
The statement asserted that ETH’s trading now more closely resembles a speculative “meme coin” than a stable, predictable asset.
The announcement highlighted the divergence in market performance since the 2024 U.S. elections, noting Bitcoin’s rebound while Ethereum continued to struggle.
At the time of the statement, ETH was reported down approximately 51% year-to-date, trading around $1,833, whereas Bitcoin traded near $97,000, close to its all-time high.
This market split was deemed too significant for the firm to overlook, prompting CEO Alexander Blume to state definitively, “Two Prime is done with ETH.”
Criticism of Ethereum’s Ecosystem and Strategic Direction
Two Prime expressed, suggesting an unawareness of these critical issues.
Contrasting View on Bitcoin
Conversely, Two Prime views Bitcoin favorably, emphasizing its distinct use case, predictability, and demonstrated scale.
The firm highlighted BTC’s market performance, including strong inflows into Bitcoin ETFs (over $115 billion in assets, representing a significant portion of total supply) compared to much smaller and slowing inflows for Ethereum ETFs (around $6.68 billion).
“Two Prime is done with ETH,” summarized CEO Alexander Blume.
Market sentiment from prediction platforms like Myriad also reflected continued caution regarding ETH’s near-term price recovery.
Context of Ethereum Foundation Changes
This institutional withdrawal occurs despite recent organizational adjustments within the Ethereum ecosystem.
In March, the Ethereum Foundation appointed core researcher Hsiao-Wei Wang and Nethermind CEO Tomasz Stańczak as co-directors.
The Foundation framed this move as part of an effort to support Ethereum’s evolution into a foundational layer for global finance.
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