Digital asset derivatives company Two Prime: no longer accepting ETH loans, only focusing on BTC

Two Prime, a digital asset derivatives company, has announced that despite its success on ETH, it will focus on BTC asset management and lending in the future. The statistical trading behavior, value proposition, and community culture of ETH have failed to the point where they are not worth participating in. In the case where BTC becomes an alternative, the risk return of ETH is fundamentally unreasonable. Two Prime claims that as an algorithmic trading company, it values data more than narrative. The data shows that ETH has undergone fundamental changes. Its correlation with BTC has decreased, and tail risk has significantly increased. Now, its trading style is more like a meme coin than a predictable asset. Even during the turbulent period of the first quarter of 2025, Bitcoin maintained its fundamental trend, while ETH experienced multiple standard deviation fluctuations. This is due to the safe haven environment and widespread selling by long-term ETH holders. For algorithmic trading and ETH supported lending, this brings trouble because even considering the high volatility expectations of the digital asset market, the performance of the asset is no longer predictable. Two Prime stated that in the past 15 months, Two Prime Lending has become the world's second-largest BTC and ETH mortgage lending institution, having completed over $1.5 billion in loans. The company has been trading and lending with these two assets because they are the only two assets with sufficient liquidity for institutional participation.