As Ether’s price has struggled in the first quarter of 2025, the US-based investment advisory firm, Two Prime, has made a significant policy shift by dropping support for ETH and adopting a Bitcoin-only strategy. This strategic decision follows the firm’s experience lending $1.5 billion in both Bitcoin (BTC) and Ether (ETH) over the past 15 months, highlighting a pivot that may reflect broader market trends.
Two Prime announced on May 1 that it would focus solely on Bitcoin asset management and lending. The firm justified this decision by stating that “ETH’s statistical trading behavior, value proposition, and community culture have failed beyond a point that is worth engaging.” This declaration raises important questions about the viability of Ether as an investment asset, particularly as it has lost 45% of its value year-to-date.
Analyzing the Data-Driven Rationale
As an algorithmic trading firm, Two Prime emphasizes data-driven decision-making over narrative-driven speculation. They noted that recent data indicates ETH has fundamentally changed, becoming increasingly decoupled from Bitcoin’s predictability. According to Two Prime, “It trades now like a memecoin rather than a predictable asset.” This assertion suggests that the volatility of Ether has surpassed the expectations even inherent in digital asset markets, complicating algorithmic trading and ETH-backed lending initiatives.
Reactions from the Community
The firm’s critiques of Ether were met with a mix of skepticism and engagement from the cryptocurrency community. Some observers interpreted Two Prime’s statement as a potential bottom signal for ETH, expressing a belief that its price could stabilize and rebound from this downtrend. This perspective underscores the volatile nature of market sentiment within the crypto landscape, where individual opinions can pivot sharply based on market movements.
Comparing ETF Performance
Furthermore, Two Prime highlighted the lackluster performance of Ether exchange-traded funds (ETFs). BTC ETF buying has vastly outpaced ETH by nearly 24 times, suggesting a waning interest from institutional investors. The firm argued that the underperformance of ETH’s ETFs creates a reflexive loop that discourages further investment and promotion by key institutional players.
Despite these challenges, Ether remains the top altcoin for crypto ETFs in terms of assets under management (AUM), with $9.2 billion reported by CoinShares, compared to far lower figures for assets like Solana (SOL) and XRP. This statistic indicates that while institutional interest may be dwindling, Ether still commands a significant standing within the broader crypto ecosystem.
As the situation develops, the ongoing dialogue surrounding Ether’s future will undoubtedly continue to evolve. Investors and market analysts alike will be watching closely to see if Two Prime’s decision marks a turning point for Ether or if the asset can recover and reclaim its place within the digital asset hierarchy.
