Ether Price Plummets: Investment Firm Calls ETH ‘Memecoin-Like’
The volatile crypto market often sparks strong opinions, and a recent move by a registered investment firm has certainly done that. With the Ether price seeing a significant downturn, one US-based firm is taking a drastic step, labeling ETH’s behavior akin to a ‘memecoin’.
Why One Investment Firm Ditched Ether for Bitcoin
Two Prime, a US SEC-registered investment adviser firm, recently announced a major shift in strategy: going Bitcoin-only. After fifteen months of providing loans in both Bitcoin (BTC) and Ether (ETH), the firm decided to focus solely on BTC asset management and lending as of May 1.
The reason? Two Prime stated that “ETH’s statistical trading behavior, value proposition, and community culture have failed beyond a point that is worth engaging.” This decision comes as the ETH price has fallen sharply year-to-date.
Analyzing the ETH Price Drop and Trading Behavior
Ether has experienced a tough start to 2025, dropping 45% year-to-date. While some market participants are speculating on a potential bottom and price reversal soon, Two Prime offers a different perspective based on their algorithmic trading data.
The firm argues that Ether no longer trades predictably. Unlike Bitcoin, which they claim remained within its fundamental behavior during Q1 2025 turbulence, ETH saw “several multi-standard deviation moves.” This unpredictability, they contend, makes ETH trade “like a memecoin rather than a predictable asset,” creating challenges for algorithmic trading and ETH-backed lending.
Here’s a look at some of Two Prime’s key points:
- ETH data suggests a fundamental change in behavior.
- Ether has de-correlated from Bitcoin.
- ETH trading is now unpredictable, similar to memecoins.
- Bitcoin maintained fundamental behavior during market turbulence.
Bitcoin vs Ether: ETF Performance and Institutional Interest
Two Prime also highlighted the disparity in performance and interest between Bitcoin and Ether exchange-traded funds (ETFs). They noted that BTC ETF buying has significantly outpaced ETH ETFs, 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,” Two Prime stated. They added that “BTC has found the mainstream while ETH has floundered.”
Despite the slow start for spot Ether ETFs approved in May 2024 and some issuers withdrawing or liquidating futures products, Ether still holds a significant position in crypto ETPs. According to CoinShares data, Ether-based ETPs had $9.2 billion in assets under management recently, second only to Bitcoin, and far ahead of other altcoins like Solana ($1.4 billion) and XRP ($1 billion).
Community Reaction: Is This an ETH Bottom Signal?
Two Prime’s critical assessment of Ether quickly drew responses from the crypto community. Many interpreted the firm’s public withdrawal of support as a potential bottom signal for the crypto market, specifically for ETH.
Some dismissed Two Prime’s opinion, questioning the firm’s relevance or the validity of their comparison, pointing to volatility in traditional markets like the S&P 500. Others, however, embraced the idea that such negative sentiment from an investment firm could precede a price rebound, a common belief in crypto market cycles.
Summary: Navigating the Ether Price Volatility
The recent commentary from Two Prime underscores the challenges and differing perspectives in the digital asset space. While the Ether price has seen a substantial decline and one firm views its behavior as unpredictable, others in the community see this period as a potential turning point. The contrast in performance between Bitcoin and Ether ETFs also highlights evolving institutional interest. As the market navigates this volatility, investors are left to weigh data-driven assessments against speculative sentiment and community outlook.
