Digital asset derivatives company Two Prime: No longer accepts ETH lending, only focusing on BTC

PANews reported on May 2 that digital asset derivatives company Two Prime issued an announcement stating that despite its success on ETH, it will focus on BTC asset management and lending in the future. ETH's statistical trading behavior, value propositions, and community culture have failed to the point where it is not worth participating. With BTC becoming 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. Data shows that ETH has undergone fundamental changes. Its correlation with BTC has been reduced and the tail risk has increased significantly. 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 fundamentals, while ETH experienced multiple volatility in multiple standard deviations. This stems from the risk-haven environment and the widespread sell-off by long-term ETH holders. This brings trouble to both algorithmic trading and ETH-backed lending, because the asset's performance is no longer predictable even considering the high volatility expectations in the digital asset market.

Two Prime Lending has become the world's second largest BTC and ETH mortgage lender in the past 15 months, with more than $1.5 billion in loans, according to Two Prime. The company has been trading and lending on these two assets because they are the only two assets with strong enough liquidity to be involved in the institutions.