Investment firm Two Prime has announced a shift to a strategy focused solely on Bitcoin, abandoning its use of Ethereum in their portfolio. This decision was triggered by Ethereum's sharp price drop and its unstable market behavior.
Reasons for Abandoning Ethereum
Two Prime, which issued over $1.5 billion in loans backed by Bitcoin and Ethereum over the last 15 months, cited Ethereum's unpredictable behavior, stating it now trades more like a memecoin than a structured digital asset. The firm argued that such instability renders Ethereum unsuitable for algorithmic strategies and lending models.
Market Situation for ETFs
The Bitcoin and Ether ETF market continues to show different results. Ether ETFs, approved in mid-2024, have failed to attract the same interest as Bitcoin products. Several issuers, including VanEck, ARK, and WisdomTree, have had to scale back or withdraw their Ether-related offerings amid weak demand.
Future of Bitcoin and Ethereum
Despite the current situation, Ethereum maintains its top position among altcoins with $9.2 billion in assets under management, ahead of rivals like Solana and XRP. However, Two Prime's withdrawal adds to the growing list of institutional players moving away from Ethereum due to its price and reliability issues. Some experts view this move as premature, while others see it as a sign that Ethereum may have hit its bottom.
Two Prime's decision to focus solely on Bitcoin is based on dissatisfaction with Ethereum's instability and reflects a broader trend of institutional investors abandoning ETH. The impact of future market changes on these cryptocurrencies will continue to be monitored.
