On May 2nd, Two Prime, a digital asset derivatives company, announced that despite its success on ETH, it will focus on BTC asset management and lending in the future. ETH's statistical trading behavior, value proposition, and community culture have failed to the point where it is not worth participating. In the case of BTC as an alternative, the risk-reward of ETH is simply unreasonable.
Two Prime claims that as an algorithmic trading company, it values data more than narrative. The data shows that ETH has fundamentally changed. Its correlation with BTC has decreased, and tail risk has increased significantly. Now, its trading style is more like a meme coin than a predictable asset. Even during the turbulent quarter 1 of 2025, Bitcoin has maintained its fundamental movement, while ETH has experienced multiple multiple standard deviation swings. This stems from a safe-haven environment and a general sell-off among long-term holders of ETH. For both algorithmic trading and ETH-backed lending, this poses a problem because the performance of the asset is no longer predictable, even considering the high volatility expectations in the digital asset market.
Digital asset derivatives firm Two Prime: no longer accepting ETH lending, focusing only on BTC
2025-05-02 00:42:44
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