Two Prime is abandoning Ethereum in favor of Bitcoin, citing the largest altcoin's characteristics akin to a memecoin and its disappointing price performance as reasons for this strategic shift.

The SEC-approved investment advisory firm has decided to focus exclusively on Bitcoin (BTC) while analyzing the shortcomings of Ethereum.

Two Prime Drops Ethereum Over Memecoin Behaviour

The SEC-approved investment advisory firm Two Prime has decided to discontinue its association with Ethereum due to a series of unfavorable fundamentals and on-chain metrics.

In a company announcement, it was revealed that the derivatives firm will redirect its focus towards Bitcoin, severing its ties with Ethereum after a six-year partnership.

Two Prime operated Two Prime Lending, which became the second-largest provider of loans backed by ETH and BTC. Instead of exploring other cryptocurrency-backed lending options,

Two Prime concentrated on $BTC and $ETH due to their substantial liquidity for institutional engagement. After experiencing moderate success with Ethereum over the past six years,

Two Prime has announced its shift towards prioritizing BTC lending. The press release outlined numerous factors contributing to the company's choice to transition from Ethereum to Bitcoin.

The trading patterns, value proposition, and community dynamics of ETH have deteriorated to a level that no longer warrants engagement. The risk-reward ratio is currently untenable, especially with BTC serving as a viable alternative.

From the outset, Two Prime asserts that Ethereum (ETH) functions more like a memecoin than a stable asset.

The report highlights that $ETH exhibited 'multi-standard deviation movements' after becoming de-correlated from Bitcoin in the first quarter of 2025.

Consequently, the Ethereum-to-Bitcoin ratio has plummeted to its lowest point in five years due to ETH's disappointing price performance throughout 2025.

A Raft Of Reasons Behind The Company’s Decision To Ditch ETH

In addition to its behavior as a memecoin, Two Prime observes that the price of Ethereum has not shown any signs of recovery following its recent decline.

The firm highlights that investors are refraining from purchasing during this dip, indicating a notable disinterest in the largest altcoin.



Two Prime also points out that Bitcoin ETF inflows have exceeded those of Ethereum by nearly 24 times, reflecting a decrease in institutional interest.

Moreover, the firm criticizes a flawed business model that permits Ethereum layer 2 solutions to capture a portion of its revenue.

The increasing competition from Solana and other emerging blockchains is significantly eroding Ethereum's market share.

Two Prime contends that Ethereum is hindered by ineffective leadership and is suffering as a consequence of its initial success, failing to adapt to contemporary demands.


An expert has cautioned that Ethereum faces significant risks if it does not achieve a scaling of 100X within the next five years.

The current magnitude of the asset and the potential for global adoption render BTC a significantly more favorable risk-adjusted investment compared to ETH, according to the statement.

The decision by Two Prime to divest its ETH holdings has resulted in a nearly 2% decline in prices following the announcement.

In a similar vein, Galaxy Digital previously sold a portion of its ETH assets to acquire SOL, which negatively impacted price performance.

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