ETH, BMNR news: Short seller Culper Research says ether tokenomics is ‘impaired’
March 5, 2026
ETH, BMNR news: Short seller Culper Research says ether tokenomics is ‘impaired’
The short seller firm said that Ethereum’s native token is “impaired,” leaving treasury firm BitMine holding the bag while co-founder Vitalik buterin is selling.
By Krisztian Sandor|Edited by Nikhilesh De
Mar 5, 2026, 9:14 p.m.
- Short seller Culper Research disclosed a short position in ether and ETH-linked stocks including BitMine.
- The firm argued Ethereum’s Fusaka upgrade weakened the tokenomics of the second-largest crypto by collapsing fee revenues and enabling spam transactions.
- BitMine, a major ETH holder, has accumulated 4.4 million ETH and is estimated to be sitting on roughly $7.4 billion in unrealized losses.
Short seller Culper Research is betting against ether (ETH) and ETH-linked stocks such as BitMine (BMNR), arguing that the network’s economics deteriorated following Ethereum’s latest network upgrade.
The firm said in a Thursday report that the December 2025 upgrade dubbed Fusaka flooded the network with excess blockspace and has “impaired ETH tokenomics.” That drove transaction fees sharply lower. Because validators earn part of their income from those fees, the drop has reduced staking yields.
That dynamic could create a negative feedback loop, the report said, where declining validator yields reduce staking demand and network security.
The report also highlighted that Ethereum co-founder Vitalik Buterin sold nearly 20,000 ETH, worth around $40 million at current prices, this year, citing data from blockchain sleuth Lookonchain.
“Vitalik is selling, while bulls like Tom Lee are clueless as to ETH’s new reality,” the report said. “We’re with Vitalik.”
The report pushes back on bullish claims from Lee, chairman of Ethereum-centric treasury firm BitMine, who has pointed to rising transaction counts and active addresses as evidence of stronger network fundamentals.
Culper said those metrics are misleading. Its analysis claimed a significant share of the activity surge stems from address poisoning attacks, a scam tactic where attackers send small transactions to trick users into copying malicious wallet addresses. Culper estimated Ethereum fees have dropped roughly 90% since the upgrade.
“By Lee’s own logic, if utility is NOT going up, then ETH is in a death spiral,” the report said. “This is exactly what we believe is happening.”
The short thesis also targeted BitMine (BMNR), one of the largest corporate buyers of ether.
Since July, the company has accumulated roughly 4.4 million ETH as part of its treasury strategy. With ether prices down significantly from recent highs, those holdings are estimated to be 45% underwater, with BitMine sitting on roughly $7.4 billion in unrealized losses, DropsTab data shows.
BitMine did not return a request for comment by press time.
Read more: Vitalik Buterin reveals his bold new plan to fix Ethereum’s scaling problem
More For You
Feb 27, 2026
CoinDesk Research looks into how Pudgy Penguins disrupts traditional toys market via a phygital model. With 2M+ units sold, they scale via global partnerships and events.
What to know:
- Disrupting a Stagnant Market: Pudgy Penguins is utilizing a “Negative CAC” model to challenge the traditional $31.7B licensed toy industry by treating physical merchandise as a profitable user acquisition tool rather than just a final product.
More For You
By James Van Straten|Edited by Sheldon Reback
7 hours ago
The cash flow generated will support the bitcoin miner’s expansion into AI and high-performance computing data centers.
What to know:
- CleanSpark produced 568 BTC in February and sold 553 BTC, one of the highest production-to-sales ratios the company has reported, generating about $36.6 million in proceeds.
- The company is expanding AI-ready infrastructure, including a 300 MW Texas campus, while holding 13,363 BTC in treasury, with 1,086 BTC pledged as collateral.
Search
RECENT PRESS RELEASES
Related Post
