“Ethereum has failed … it is not worth getting involved”: Two Prime

Two Prime, specialized investment firm and loans supported in digital assets, announced its decision to focus exclusively on Bitcoin (BTC). The company justifies its decision by pointing out that, despite the success obtained with Ethereum, its statistical behavior in the market, its value proposal and the culture of its community have failed significantly. In his opinion, having the creation of Satoshi Nakamoto as an alternative, the risk-benefit ratio of continuing to offer eth-based products is no longer justifiable.

Thus, the company was sharp in its statement, arguing that they prioritize the data above the narratives and that empirical evidence shows a significant change in Ethereum.

“Now it is negotiated as a memecoin, instead of a predictable asset,” they said from the firm. They explain that, even during the volatility of the first quarter of 2025, Bitcoin remained within his expected behavior, while ETH recorded fluctuations that qualify as extreme. They attribute this to an environment of risk aversion and a generalized capitulation of long -term investors in the cryptocurrency of the Ethereum Network, which represents a problem for the loan model backed by this asset.

In his analysis, Two Prime takes as a starting point the presidential elections in the United States, which gave Donald Trump as winner. During his campaign, the now president had promised a more favorable approach to cryptocurrencies. However, after assuming the position and unleashing a tariff war, the financial markets were strongly affected.

The company indicates that, from the elections, “ETH has shown very little recovery and a strong negative impulse”while Bitcoin has returned to his average behavior, which suggests that “people are buying in falls.” Instead, they consider that this behavior is not being replicated in Ethereum.

Another key point that the company stands out is the difference in institutional demand between Bitcoin and Ethereum, especially through the quoted funds (ETF). According to the firm, Recent data show a clear advantage for BTCwhich further reinforces your decision to focus only on this asset.

We can see that the purchase of BTC by the ETF has exceeded that of ETH, by a margin of almost 24 times. Even with a higher market capitalization, the total amount of bitcoin acquired by these funds is more than double that of Ethereum. In addition, ETH’s real demand could be overestimated, since much of these purchases are probably compensated for short positions in futures, used by traders that seek to generate performance with delta-neutral type [una estrategia en la que el trader busca que su cartera mantenga un valor estable, sin importar si el precio del activo sube o baja ligeramente]. The low performance of the ETH ETF translates into a negative cycle: institutions such as Blackrock end up allocating less resources to its promotion and marketing. While Bitcoin already managed to position himself in the mass market, Ethereum has lost strength.

Two Prime statement.

There was even space in the announcement to compare Ethereum with Solana. They believe that the latter “It offers faster transaction speeds, lower costs and better user experience than ETH”. And they add: “For some slow transactions, Ethereum works well, but for others that require almost zero latency, such as payments or video games, he simply cannot compete.” They also question the Ethereum business model based on layer 2 solutions (protocols designed to improve their scalability, speed and costs), pointing out that these have “cannibalized almost all monetization of this infrastructure.”

By way of closing, from Two Prime they also offered a more subjective reflection, focused on Ethereum’s cultural and organizational evolution. According to his vision, the network has stopped behaving as an agile technological project to become “A bureaucratic and ideologized structure”.

From our perspective, ETH became a victim of its own initial success, evolving towards a bureaucratic and ideological organization, instead of continuing to be a project focused on building technology. The lack of strong leadership and of a clear approach has caused a loss of course: nothing is done especially well and decisions are locked by slow processes. While decentralization is a noble ideal, competitive markets need efficient leadership.

Two Prime statement.

For the firm that concerns us, Bitcoin represents a unique case within the ecosystem. They point out that their predictable behavior, together with its current scale and the potential that it still retains for a massive global adoption, “make it an investment with a risk-benefit relationship much higher than that of Ethereum.” In contrast, Two Prime argues that “ETH and other similar projects behave as speculative technological startups that compete for market share, without establishing a clear and sustainable proposal.” The real problem for Ethereum, according to the firm, is that everyone seems to have understood … except their own leaders.