Two Prime drops Ethereum, labeling it a memecoin amid waning institutional interest
The post Two Prime drops Ethereum, labeling it a memecoin amid waning institutional interest appeared on BitcoinEthereumNews.com. Algorithmic trading firm Two Prime formally dropped its exposure to Ethereum (ETH), stating that ETH now trades as a memecoin rather than a predictable asset. According to CEO Alexander Blume, the firm will now exclusively manage and lend against Bitcoin (BTC). He added that the firm believes that Bitcoin is the only digital asset that meets institutional standards for liquidity, predictability, and long-term investment viability. The decision follows over a year of performance divergence between BTC and ETH, during which Two Prime had issued more than $1.5 billion in loans backed by Bitcoin and Ethereum through its lending division. Despite that exposure, the firm concluded that Ethereum’s current behavior no longer aligns with risk-adjusted return expectations suitable for institutional portfolios. Blume wrote: “ETH’s statistical trading behavior, value proposition, and community culture have failed beyond a point worth engaging.” De-correlation and elevated tail risk A quantitative analysis cited by Two Prime shows that Ethereum’s volatility and return structure have decoupled from Bitcoin since the November 2024 US election. While Bitcoin has shown classic mean-reversion characteristics, suggesting investor confidence and dip-buying activity, ETH has continued to trend lower with limited rebounds. In scatterplots comparing 30-day returns with 30-day forward returns, ETH shows persistent negative momentum and lacks the symmetry observed in BTC data. Additionally, ETH’s volatility now resembles that of memecoins like Dogecoin (DOGE). A comparison of 30-day range volatility across BTC, ETH, and DOGE shows that ETH has moved away from its historically moderate volatility profile, displaying sudden multi-standard deviation moves inconsistent with institutional-grade assets. Weak institutional demand Two Prime also pointed to a widening gap in institutional demand. Bitcoin ETFs currently manage over $113 billion in assets, consuming 5.76% of the total BTC supply. In contrast, ETH ETFs account for only $4.71 billion in assets, covering 2.22% of the ETH…
The post Two Prime drops Ethereum, labeling it a memecoin amid waning institutional interest appeared on BitcoinEthereumNews.com.
Algorithmic trading firm Two Prime formally dropped its exposure to Ethereum (ETH), stating that ETH now trades as a memecoin rather than a predictable asset. According to CEO Alexander Blume, the firm will now exclusively manage and lend against Bitcoin (BTC). He added that the firm believes that Bitcoin is the only digital asset that meets institutional standards for liquidity, predictability, and long-term investment viability. The decision follows over a year of performance divergence between BTC and ETH, during which Two Prime had issued more than $1.5 billion in loans backed by Bitcoin and Ethereum through its lending division. Despite that exposure, the firm concluded that Ethereum’s current behavior no longer aligns with risk-adjusted return expectations suitable for institutional portfolios. Blume wrote: “ETH’s statistical trading behavior, value proposition, and community culture have failed beyond a point worth engaging.” De-correlation and elevated tail risk A quantitative analysis cited by Two Prime shows that Ethereum’s volatility and return structure have decoupled from Bitcoin since the November 2024 US election. While Bitcoin has shown classic mean-reversion characteristics, suggesting investor confidence and dip-buying activity, ETH has continued to trend lower with limited rebounds. In scatterplots comparing 30-day returns with 30-day forward returns, ETH shows persistent negative momentum and lacks the symmetry observed in BTC data. Additionally, ETH’s volatility now resembles that of memecoins like Dogecoin (DOGE). A comparison of 30-day range volatility across BTC, ETH, and DOGE shows that ETH has moved away from its historically moderate volatility profile, displaying sudden multi-standard deviation moves inconsistent with institutional-grade assets. Weak institutional demand Two Prime also pointed to a widening gap in institutional demand. Bitcoin ETFs currently manage over $113 billion in assets, consuming 5.76% of the total BTC supply. In contrast, ETH ETFs account for only $4.71 billion in assets, covering 2.22% of the ETH…
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