Ethereum just lost one of its long-time institutional backers.

In a Thursday statement, algorithmic trading firm Two Prime announced it is dropping all exposure to Ethereum (ETH) and will exclusively manage and lend against Bitcoin (BTC) going forward, citing Ethereum’s unpredictable behavior, declining market momentum, and eroding institutional appeal.

Two Prime didn’t say how much Ethereum exposure it had, exactly, before making the switch. But it was very detailed in its criticisms of ETH.

The firm, an SEC-registered investment advisor, says it has lent over $1.5 billion against BTC and ETH in the past 15 months alone. But, it argued, the risk-reward profile of ETH has deteriorated to the point of being “unjustifiable.”

“ETH’s statistical trading behavior, value proposition, and community culture have failed beyond a point that is worth engaging,” the statement said. “It trades now like a meme coin rather than a predictable asset.”

Two Prime said Ethereum’s continued slump since the 2024 U.S. elections, contrasted with Bitcoin’s rebound, exposed a market split too deep to ignore. As CEO Alexander Blume put it, “Two Prime is done with ETH.”

As of now, Ethereum is trading at approximately $1,833, showing a 51% year-to-date decline. Bitcoin is trading near $97,000 after having gained 2.7% since the start of the year. BTC’s current price is about 11% off its all-time high, per CoinGecko data.

Traders on the Myriad prediction market remain skeptical about Ethereum’s short-term prospects. At time of publication, predictors point to a 82% likelihood that ETH will finish below $1,900 by Sunday night, showing that institutional and retail confidence remains tepid. (Disclosure: Myriad is owned by Decrypt’s parent company, DASTAN.)

Data from CoinGlass shows that BTC ETFs hold over $115 billion in assets, consuming 5.76% of total Bitcoin supply, while Ethereum ETFs manage just $6.68 billion, with inflows slowing dramatically since approval.

Apart from market structure, Two Prime was critical of Ethereum’s direction.

It flagged blockchains such as Solana as more compelling for developers and users, offering better speed, cost, and UX.

Ethereum’s Layer-2s, it said, have cannibalized the mainnet’s value, leaving it without a clear monetization strategy.

“ETH became a victim of its early success… slow processes, mission creep, and no single thing being done particularly well,” the firm said.

Meanwhile, Bitcoin, Two Prime noted, “stands alone in its use case,” offering predictability and scale that ETH can no longer match.

“The issue for ETH and its leadership,” the trading firm concluded, “is that everyone but them seems to know that.”

Meanwhile, in March, the Ethereum Foundation appointed two co-directors, core researcher Hsiao-Wei Wang and Nethermind CEO Tomasz Stańczak, in a movemeant to distribute technical and operational responsibilities at the highest level.

The Foundation said the change was designed to help Ethereum “transition from an early-stage project to a robust base layer of global finance.”