PANews May 2 news, digital asset derivatives company Two Prime announced that despite its success with ETH, it will focus on BTC asset management and lending in the future. The statistical trading behavior, value proposition, and community culture of ETH have failed to the point of being not worth participating in. In light of BTC becoming an alternative, the risk-reward ratio of ETH is simply unreasonable.
Two Prime claimed that as an algorithmic trading company, it values data over narratives. Data shows that ETH has undergone fundamental changes. Its correlation with BTC has decreased, and tail risks have significantly increased. Now, its trading style resembles that of a meme coin rather than a predictable asset. Even during the turbulent period in the first quarter of 2025, Bitcoin maintained its fundamental trend, while ETH experienced multiple standard deviation fluctuations. This stems from a risk-off environment and widespread selling by long-term ETH holders. This poses challenges for algorithmic trading and ETH-supported lending, as the asset's performance is no longer predictable, even considering the high volatility expectations of the digital asset market.
Two Prime stated that over the past 15 months, Two Prime Lending has become the second largest BTC and ETH collateral lending institution globally, having completed over $1.5 billion in loans. The company has been trading and lending these two assets because they are the only two that have sufficient liquidity for institutional participation.
