Investment Firm Switches to Bitcoin-Only Strategy as Ether Behaves Like Memecoin
US SEC-registered investment advisory firm Two Prime has ended support for Ether and adopted a Bitcoin-only strategy. The announcement came on May 1, after the firm provided $1.5 billion in loans across both Bitcoin and Ether over the past 15 months.
Two Prime cited ETH's 45% value loss year-to-date as a factor in their decision. "ETH's statistical trading behavior, value proposition, and community culture have failed beyond a point that is worth engaging," the company stated in their announcement.
The firm explained their data-driven approach led to this change. "As an algorithmic trading firm, we value data more than narratives," Two Prime said. They claimed ETH "trades now like a memecoin rather than a predictable asset" and has shown "several multi-standard deviation moves" during Q1 2025.
This volatility creates problems for algorithmic trading and ETH-backed lending, according to Two Prime. Founded in 2019 by Alexander Blum and Marc Fleury, the firm has offered trading and lending services for both BTC and ETH for six years.
The cryptocurrency community quickly responded to Two Prime's announcement. Many viewed it as a potential bottom signal for ETH, suggesting the price might bounce back soon. Some questioned the relevance of Two Prime's decision, with one observer noting, "Never even heard of them. Seems irrelevant."
Two Prime also pointed to weak performance of Ether ETFs compared to Bitcoin ETFs. They noted that "BTC ETF buying has outpaced ETH by almost 24 times" and suggested institutional resources are increasingly focused on Bitcoin rather than Ether.
Despite these challenges, Ether remains the largest altcoin for crypto ETFs by assets under management with $9.2 billion, according to CoinShares. This significantly exceeds Solana and XRP, which follow with $1.4 billion and $1 billion respectively.
While Ether struggles, Bitcoin continues to attract major investors. Michael Saylor's Strategy, now holding over 538,200 Bitcoin worth more than $50.5 billion, hinted at another purchase following its recent $555 million acquisition. Bitcoin whale wallets have increased from 124,000 to 137,600 in April as large investors accumulate during Bitcoin's price recovery to above $94,000.
