By Key Points
- Ether memecoin fears grow as ETH crashes 45% and Two Prime exits
- Two Prime abandons ETH, shifts to Bitcoin-only strategy
- Firm criticizes ETH’s unpredictability and volatility
- Community sees the move as a potential ETH bottom signal
Ether’s rough 2025 just got worse. After a steep 45% year-to-date decline, the second-largest cryptocurrency is under fire from U.S. investment advisory firm Two Prime, which has officially cut ties with ETH and shifted to a Bitcoin-only trading strategy.
The firm, which has managed over $1.5 billion in BTC and ETH loans in the past 15 months, announced its decision on May 1. According to Two Prime, ETH has become too volatile and unpredictable, now trading more like a memecoin than a serious financial asset.
”ETH trades like a memecoin rather than a predictable asset”
Meanwhile the SP500:
What a retarded essay statement lmao https://t.co/YHQX9yxcAm pic.twitter.com/Svv3tD8hLN
— 💎SEMB💎 (@SEMB_xD) May 2, 2025
“ETH’s statistical trading behavior, value proposition, and community culture have failed beyond a point that is worth engaging,” the firm declared.
This bold move highlights growing concerns among institutional investors about Ethereum’s risk-reward balance compared to Bitcoin. Despite crypto optimists speculating that ETH may soon bottom out, Two Prime is steering clear.
Related: Ethereum faces a growing narrative crisis as concerns mount over its long-term utility.
ETH now “trades like a memecoin,” says Two Prime
Two Prime’s decision isn’t just about price drops. The firm emphasized that ETH no longer behaves in a predictable, data-driven manner, which is essential for algorithmic trading strategies.
“It trades now like a memecoin rather than a predictable asset. Even during the turbulence of Q1 2025, Bitcoin remained within its fundamental behavior, whereas ETH saw several multi-standard deviation moves,” Two Prime explained.
This erratic behavior, even by the volatile standards of crypto markets, has made ETH challenging for both trading and lending operations.
Founded in 2019 by Alexander Blum and Marc Fleury, Two Prime has been a long-time player in both BTC and ETH markets. But now, the firm believes Bitcoin’s stability and institutional backing offer a clearer path forward.
For more on recent Bitcoin movements, read: Bitcoin and Ethereum options expire shaking up market trends.
Community backlash and ETF struggles add to ETH’s woes
Two Prime’s harsh critique quickly sparked reactions across the crypto community. Many saw the firm’s withdrawal as a classic bottom signal—a sign that Ethereum might be near the end of its downtrend.
One trader dismissed the statement as overblown, comparing ETH’s volatility to the S&P 500’s 4.7% YTD drop. Another shrugged off the importance of Two Prime itself, suggesting the firm’s view doesn’t represent the broader market sentiment.
“If this isn’t a bottom signal for ETH, I don’t know what is,” commented a popular crypto analyst on X.
If this isn’t a bottom signal for ETH idk what is
— SPACEAUCTIONS.PLS (@SpaceAuctions) May 2, 2025
Adding to Ethereum’s struggles, Ether exchange-traded funds (ETFs) have underperformed significantly. According to Two Prime, Bitcoin ETF buying has outpaced Ether by nearly 24 times. This lackluster performance has discouraged major institutional players like BlackRock from promoting ETH-focused products.
Some ETF issuers, including VanEck and WisdomTree, have already ceased trading or withdrawn their Ethereum ETF proposals. Even ARK liquidated its futures ETFs for both Ether and Bitcoin earlier this year.
Never even heard of them. Seems irrelevant.
— fst_nml (@fst_nml) May 2, 2025
Yet, despite these challenges, Ether still dominates the altcoin ETF market, with $9.2 billion in assets under management (AUM) by late April 2025. For comparison, Solana and XRP ETFs trail behind with $1.4 billion and $1 billion AUM, respectively.
Related: Ethereum isn’t alone in its struggles—check out how MOVE token price dropped significantly this year.
Crypto ETP flows by asset (in millions of US dollars). Source: CoinShares – Techtoken
Can Ethereum recover or will alternatives take over?
While many investors remain hopeful for an ETH recovery, others are eyeing alternative Layer 2 ecosystems and new projects. Notably, Base recently surpassed Arbitrum by $710 million, signaling a shift in market sentiment toward newer platforms that avoid Vitalik Buterin’s decentralization concerns.
Meanwhile, altcoins like Sky Token are evolving, with Sky Token’s recent upgrade aiming to improve network utility and attract developer interest.
Ethereum’s future may depend on how quickly it can adapt to changing market dynamics, rebuild confidence, and reassert its dominance in both DeFi and institutional markets.
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