Two Prime, a firm specializing in digital asset-backed lending and investment, announced its decision to focus exclusively on Bitcoin (BTC). The company justifies its decision by pointing out that, despite the success achieved with Ethereum, its statistical performance in the market, its value proposition, and the culture of its community have significantly failed. In its opinion, with Satoshi Nakamoto's creation as an alternative, the risk-reward ratio of continuing to offer Ethereum-based products is no longer justifiable.
Thus, the company was blunt in its statement, arguing that they prioritize data over narratives and that empirical evidence shows a significant change in Ethereum.
“It's now trading like a memecoin, rather than a predictable asset,” the firm noted. They explain that, even during the volatility of the first quarter of 2025, Bitcoin remained within its expected behavior, while ETH registered fluctuations that they describe as extreme. They attribute this to a risk-averse environment and a widespread capitulation of long-term investors in the Ethereum network cryptocurrency, which poses a challenge to the asset-backed lending model.
In his analysis, Two Prime takes the US presidential election, which was won by Donald Trump, as his starting point. During his campaign, the now president had promised a more favorable approach to cryptocurrencies. However, after taking office and unleashing a tariff war, financial markets were severely affected.
The company notes that since the election, “ETH has shown very little recovery and strong negative momentum,” while Bitcoin has returned to its average performance, suggesting that “people are buying the dips.” However, they believe this behavior is not being replicated on Ethereum.
Another key point the firm highlights is the difference in institutional demand between Bitcoin and Ethereum, especially through exchange-traded funds (ETFs). According to the firm, recent data shows a clear advantage for BTC, further reinforcing its decision to focus solely on this asset.
Two Prime's statement includes a chart showing the volatility of BTC, ETH, and DOGE over a 30-day period. Source: Two Prime.
We can see that ETF purchases of BTC have far outpaced those of ETH, by a margin of nearly 24 times. Even with a higher market capitalization, the total amount of Bitcoin purchased by these funds is more than double that of Ethereum. Furthermore, actual demand for ETH may be overstated, as much of this buying is likely offset by short futures positions, used by traders seeking yield with delta-neutral strategies (a strategy in which traders seek to ensure that their portfolio maintains a stable value, regardless of whether the asset's price rises or falls slightly). The ETH ETF's underperformance translates into a negative cycle: institutions like BlackRock end up allocating fewer resources to its promotion and marketing. While Bitcoin has already managed to position itself in the mass market, Ethereum has lost momentum .
Two Prime statement.
There was even space in the announcement to compare Ethereum to Solana. They believe the latter “offers faster transaction speeds, lower costs, and a better user experience than ETH.” They add: "For some slow transactions, Ethereum works well, but for others that require near-zero latency, such as payments or video games, it simply can't compete." They also question Ethereum's business model based on layer-2 solutions (protocols designed to improve its scalability, speed, and costs), noting that these have "cannibalized almost all monetization of this infrastructure."
In closing, Two Prime also offered a more subjective reflection, focusing on Ethereum's cultural and organizational evolution. In their view, the network has ceased to behave as an agile technological project and has become "a bureaucratic and ideologized structure. "
From our perspective, ETH has become a victim of its own initial success, evolving into a bureaucratic and ideological organization rather than continuing as a project focused on building technology. The lack of strong leadership and a clear focus has led to a loss of direction: nothing gets done particularly well, and decisions are hampered by slow processes. While decentralization is a noble ideal, competitive markets require efficient leadership.
Two Prime statement.
For the firm we're discussing today, Bitcoin represents a unique case within the ecosystem. They point out that its predictable behavior, coupled with its current scale and the potential it still holds for massive global adoption, "make it an investment with a much higher risk-reward ratio than Ethereum." In contrast, Two Prime argues that "ETH and other similar projects behave like speculative tech startups competing for market share, failing to establish a clear and sustainable proposition.” The real problem for Ethereum, according to the firm, is that everyone seems to have gotten it... except its own leaders.
