Commercial company algorithmic Two Prime officially abandoned His exhibition in Ethereum (ETH), declaring that the ETH is now negotiated as a mèle rather than a predictable asset.
According to CEO Alexander Blume, the firm will now manage and lend exclusively against Bitcoin (BTC). He added that the company believes that Bitcoin is the only digital active ingredient which meets the institutional standards of liquidity, predictability and long -term viability of investments.
The decision follows more than a year of difference in performance between BTC and ETH, during which two premiums had issued more than $ 1.5 billion in loans supported by Bitcoin and Ethereum through its loan division.
Despite this exhibition, the company concluded that the current behavior of Ethereum will no longer line up with the expectations of yield adjusted to risk adapted to institutional portfolios.
Blume wrote:
“The ETH statistical trading behavior, the value proposal and community culture have failed beyond a point that is worth being engaged.”
High tail derorrelation and risk
A quantitative analysis cited by Two Prime shows that the volatility and the return structure of Ethereum have decreased from Bitcoin since the American elections of November 2024.
While Bitcoin has shown conventional characteristics of average survivor, suggesting the confidence of investors and the activity of buying drops, the ETH continued to get lower with limited rebounds.
In the dispersion diagrams comparing the 30 -day yields with 30 -day yields in advance, the ETH shows a persistent quantity of negative movement and does not have the symmetry observed in BTC data.
In addition, the volatility of Eth now resembles that of the same as Dogecoin (Doge). A comparison of the volatility of the 30-day range between BTC, ETH and DOGE shows that ETH has moved away from its historically moderate volatility profile, displaying a sudden multi-standard deviation incompatible with institutional quality assets.
Low institutional demand
Two premiums also underlined an extended gap in institutional demand. The FNB Bitcoin currently manages more than $ 113 billion in assets, consuming 5.76% of the total BTC offer. On the other hand, the ETH FNBTH represent only $ 4.71 billion in assets, covering 2.22% of ETH’s offer.
Despite a high market capitalization of Ethereum, a large part of its FNB entries can be offset by short contracts in the bases of the base, more diluting real demand.
The disparity creates a reflexive environment where the underperformance in ETH products leads asset managers to devote fewer resources to promotion, which in turn reduces the visibility and allocation of investors.
According to Blume, the incapacity of ETH to maintain a sustained institutional interest undermines its long -term viability as a maintenance of the basic digital asset.
Erosion of Ethereum’s value proposal
Beyond commercial behavior, two questioned the economic and technical model of Ethereum.
The company noted that the more recent alternatives, such as Solana (soil), are increasingly difficult to attempt Ethereum to serve as a decentralized IT platform for general use.
These new infrastructures offer faster transaction flow, lower costs and better user experience in latency -sensitive applications such as games and payments.
Blume also argued that the Ethereum Layer-2 networks cannibalized a large part of the value capture which was previously linked to the Mainnet. In its assessment, the asset does not have a clear monetization model which can support its assessment and public services allegations.
Governance and cultural opposite winds
The decision of two premiums also facilitates what it characterizes as a deterioration in governance and concentration of Ethereum.
Blume has described the internal structure of Ethereum as bureaucratic, ideologically rigid and slow to adapt to competitive market conditions. He argued that Ethereum had prioritized the egalitarian ideals on the effective development of products and the relevance of the market.
While Bitcoin offers a targeted and singular use case as a decentralized value store, the company now considers ETH as one of many speculative technological platforms without lasting advantage.
Blume concluded:
“The problem for ETH and its leadership is that everyone, except them, seems to know.”
