Ether more ‘like a memecoin,’ says trading firm as ETH drops 45% YTD

As Ether’s price has struggled in the first quarter of 2025, a US-based investment adviser firm, Two Prime, has dropped support for ETH and adopted a Bitcoin-only strategy.

After lending $1.5 billion in loans both in Bitcoin (BTC) and Ether (ETH) over the past 15 months, Two Prime decided to ditch ETH to focus solely on BTC asset management and lending, the firm announced on May 1.

“ETH’s statistical trading behavior, value proposition, and community culture have failed beyond a point that is worth engaging,” Two Primes stated.

The firm’s shift to a Bitcoin-only approach comes as ETH has lost 45% of its value year-to-date, with some optimists speculating that ETH is potentially close to the bottom and reversing its negative trend soon.

“Ether no longer trades predictably”

“As an algorithmic trading firm, we value data more than narratives,” Two Primes said, adding that the “data suggests ETH has fundamentally changed.”

In addition to de-correlating from Bitcoin, Ether has become no longer predictable, Two Primes argued, adding:

“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 Primes then went on to say that such conditions “create a headache” for both algorithmic trading and ETH-back lending as the asset no longer behaves predictably, “even by the high volatility expectations of digital asset markets.”

Founded in 2019 by Alexander Blum and Marc Fleury, Two Prime is an investment advisory firm registered with the US Securities and Exchange Commission. The firm has been offering trading and lending services for both BTC and ETH for the past six years.

Community fires back: ETH bottom signal

Two Prime’s critical remarks about Ether were quick to trigger responses from the community, with many seeing the message as another bottom signal for the cryptocurrency.

“What a retarded essay statement,” one market observer wrote on X, citing the high volatility of the S&P 500, which dropped 4.7% YTD.

“Never even heard of them. Seems irrelevant,” another commentator said, expressing doubt on whether the community should rely on Two Prime’s shifting approach to Ether.

“If this isn’t a bottom signal for ETH idk [I don’t know] what is,” another poster speculated, joining the many expecting ETH price to bounce following a downtrend cycle.

Who else ditched ETH in the past months?

Two Primes also mentioned the weak performance of Ether exchange-traded funds (ETFs), highlighting that BTC ETF buying has outpaced ETH by almost 24 times.

“The failure of ETH’s ETF creates a reflexive loop whereby institutions like BlackRock dedicate fewer resources to their promotion and sale. BTC has found the mainstream while ETH has floundered,” the firm stated.

Despite Ether ETFs seeing low performance, Ether is still the biggest altcoin for crypto ETFs in terms of assets under management (AUM), far outpacing others like Solana (SOL) and XRP (XRP).

According to the latest update from CoinShares, Ether-based exchange-traded products had $9.2 billion in AUM by the end of last week, while Solana and XRP followed with $1.4 billion and $1 billion, respectively.

*Crypto ETP flows by asset (in millions of US dollars). Source: CoinShares*

Following approval from the US SEC in May 2024, spot Ether ETFs saw a slow start in 2024, with performance losing ground compared to the massive spot Bitcoin ETF debut.

Amid low investor demand, some issuers like VanEck ceased trading futures Ether ETFs, while WisdomTree withdrew its Ethereum Trust ETF proposal in September 2024. In March 2025, ARK liquidated its futures ETFs for both Ether and Bitcoin.

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