In a strategic move signaling a shift in institutional sentiment, U.S.-based digital asset investment firm Two Prime has officially announced its transition away from Ethereum (ETH), choosing to focus its lending and trading operations exclusively on Bitcoin (BTC) going forward.
The decision comes after months of internal review, with the firm citing Ethereum’s growing volatility and speculative market behavior as primary reasons for the move. Two Prime, which has facilitated over $1.5 billion in loans backed by BTC and ETH in the past 15 months, stated that Ethereum’s ecosystem has increasingly resembled “meme coin dynamics,” making it less appealing for structured investment strategies.
“Ethereum no longer behaves like a mature, institutional-grade asset,” said Alexander Blume, Managing Partner at Two Prime. “Its price action has become highly unpredictable and driven more by hype than fundamentals, which undermines its utility for serious capital management.”
Why Bitcoin?
In contrast, Bitcoin has demonstrated consistent trading behavior, deep liquidity, and a more stable narrative as a digital store of value. Two Prime believes these qualities make it more suitable for algorithmic trading, institutional borrowing, and risk-managed portfolio strategies.
Blume emphasized that the firm’s pivot aligns with the needs of clients seeking lower-risk exposure to the crypto space. “When institutions look for digital assets to hold or lend against, they’re looking for reliability, not reactionary swings tied to protocol upgrades or tokenomics changes,” he added.
A Larger Trend?
Two Prime’s shift away from Ethereum may also reflect broader undercurrents in the institutional market. With increased scrutiny from regulators, shifting narratives around Ethereum’s transition to proof-of-stake, and the proliferation of speculative tokens built on its network, some institutional players appear to be gravitating back toward the relative simplicity and security of Bitcoin.
While Ethereum remains the backbone for DeFi and smart contracts, its evolving role in the crypto ecosystem continues to spark debate among investors.
Disclaimer: This article is for informational purposes only and is not investment advice. Investors should research carefully before making any decisions. We are not responsible for your investment decisions.
