Ether ($ETH ) is under fire as U.S. SEC-registered investment adviser Two Prime announced its pivot to a Bitcoin-only strategy, citing ETH’s increasing volatility and unpredictability. The firm, which has issued $1.5 billion in loans in BTC and ETH over the past 15 months, claims Ethereum now trades “more like a memecoin” than a reliable asset.
“ETH has fundamentally changed,” said Two Prime in a statement on May 1. “It no longer behaves in a way conducive to algorithmic trading or lending.”
ETH’s 45% year-to-date drop has rattled investor confidence, with its spot ETF performance lagging far behind Bitcoin. Two Prime also noted that ETH ETF inflows have been 24x smaller than BTC’s, creating a “reflexive loop” of institutional disinterest.
The crypto community quickly pushed back, with some seeing this as a potential bottom signal for ETH. “Never even heard of them,” one user commented, downplaying Two Prime’s influence. Others suggested the firm’s criticism could mark the start of an ETH recovery cycle.
Despite current headwinds, ETH still leads all altcoins in ETF assets under management with $9.2 billion — significantly ahead of Solana and XRP. Whether Two Prime’s exit signals a broader trend or just short-term capitulation remains to be seen.
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