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• Two Prime has said it would no longer be offering Ethereum to customers.

• According to the investment adviser, “ETH has fundamentally changed.”

• Two Prime is not the only institution that has lost faith in Ethereum in recent months.

Ethereum is being buffeted on all sides. Amid recent market underperformance, the project has faced criticisms from its community, competitors, and even institutions. Now, even as the project looks to address growing concerns and rally behind a clear vision, it has been hit with a potential institutional adoption blow.

Digital asset-focused wealth adviser Two Prime has said that it is switching to a Bitcoin-only focus and will no longer offer clients exposure to Ethereum. The firm disclosed this in a scathing statement released on Thursday.

“ETH’s statistical trading behavior, value proposition, and community culture have failed beyond a point that is worth engaging,” it said.

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According to Two Prime, “ETH has fundamentally changed” and is now trading “like a memecoin,” making it problematic for algorithmic trading and as collateral for lending. The firm cited the asset’s price action since Q4 and data comparing its volatility to Bitcoin and Dogecoin.

Ethereum is trading at around $1,850, down 55% from its Q4 high of about $4,100, while Bitcoin is down only about 12% from its highs. Two Prime said the data suggested that while investors were buying the Bitcoin dip, they were not buying Ethereum.

Meanwhile, the shared volatility data suggested that over a 30-day period, Ethereum traded more like Dogecoin than Bitcoin.

“High volatility can be profitable at times, but for institutional investors and traders, higher levels of volatility equate to lower position sizing,” it said. “This makes institutional participation less attractive, suggesting declining trading volumes and market depth.”

This low institutional interest is perhaps already evident in the flows to spot exchange-traded funds.

“ETF buying of BTC has far outpaced that of ETH by almost 24 times. Even with a higher market cap, BTC total supply consumed by ETFs is more than double that of the ETH supply,” Two Prime said, positing that the failure of Ethereum ETFs to catch a bid could translate to less resource allocation towards their promotion and sale.