US-Based Investment Firm Two Prime Shifts from ETH to BTC-Only Strategy
In a notable investment shift, US-based investment advisor firm, Two Prime, has decided to discontinue supporting Ethereum (ETH) and switched to an exclusive Bitcoin (BTC) strategy. This significant move follows after the company extended loans in both Bitcoin and Ether for the preceding fifteen months.
As per an announcement on May 1, 2025, the firm revealed its new method, citing Ethereum’s troubled performance, especially in the first quarter of the year, as the principal reason behind the switch. The firm stopped short of specifying what led to Ethereum’s statistical trading behavior, value proposition, or community culture to fail, but laid the blame squarely on these factors for their decision.
Ethereum’s Troubled Performance
The announcement also coincided with Ethereum losing 45% of its value year-to-date despite some optimists speculating an imminent price reversal. However, according to Two Primes, the data suggests Ethereum has fundamentally changed, becoming unpredictable and thus difficult to manage from an asset management and lending perspective, despite these being core services of the firm. The algorithmic trading firm indicated that they value data more than narratives, and a shift in Ethereum’s behavior necessitated the change in strategy.
About Two Prime
Established in 2019 by entrepreneurs Alexander Blum and Marc Fleury, Two Prime is an SEC-registered investment advisory firm. Over the last six years, the firm provided lending and trading services in Bitcoin and Ethereum, making the decision to drop Ethereum even more significant. Their criticism about Ethereum’s performance drew a swift response from the market participants, placing the spotlight firmly on the future price movement of the second-largest cryptocurrency by market cap.
Performance of Ether Exchange-Traded Funds (ETFs)
Two Prime also highlighted the perceived weakness of Ether-Exchange Traded Funds (ETFs). The firm suggested that the underperformance of ETH ETFs has created a reflexive loop, causing powerhouse institutions like BlackRock to devote fewer resources towards promoting and selling them.
Despite these claims, the data shows that Ether remains the largest altcoin for crypto ETFs in terms of Assets Under Management (AUM), far outpacing its peers like Solana and XRP. Data from CoinShares confirms as much, indicating that by the end of last week, Ether-based exchange-traded products had $9.2 billion in AUM, considerably more than Solana’s $1.4 billion and XRP’s $1 billion.
The Future of Ethereum ETFs
However, it is notable that there was little investor demand when spot Ether ETFs first got approval from the SEC in May 2024. Over time, the uptake did not increase, and performance lagged compared to Bitcoin ETFs. Due to the lack of demand, some issuers like VanEck discontinued trading futures Ether ETFs.
Others such as WisdomTree withdrew their Ethereum Trust ETF proposals in September 2024, and by March 2025, ARK had liquidated its futures ETFs for both Ether and Bitcoin. These events seem to lend credence to Two Prime’s assessment of the market.
The Greater Implications
The shift by Two Prime from a dual-cryptocurrency strategy to a Bitcoin-only approach illustrates the broader market trepidation about Ethereum. Investor confidence in Ethereum seems shaken, and this could become more pronounced if other institutions follow Two Prime’s lead.
Despite these developments, Ethereum still possesses a strong following, and remains the second-largest cryptocurrency by market cap. Time will tell whether the sentiments expressed by Two Prime signal a larger trend in the wider market or whether this is an isolated incident.
