report<\/a> published March 5, Culper disclosed it is shorting Ethereum (ETH) as well as equity linked to the asset, including BitMine Immersion Technologies, a firm that has built a large treasury position in the cryptocurrency.<\/p>\nThe report argues that Ethereum\u2019s recent upgrades, designed to increase block capacity and reduce transaction costs, have had an unintended consequence: sharply reducing fee revenue that supports the network\u2019s validator incentives.<\/p>\n
<\/p>\n
Culper said Ethereum\u2019s fee generation has collapsed in recent months, undermining the narrative that the network\u2019s tokenomics are strengthening over time.<\/p>\n
Ethereum\u2019s fee revenue has collapsed, and with it the economic engine that once justified ETH\u2019s valuation, the report stated.<\/p>\n
According to the firm, the drop in fees is eroding staking yields for validators, potentially weakening long-term incentives to secure the network. Culper described the dynamic as a possible \u201cdeath spiral,\u201d in which falling economic rewards discourage participation while further undermining network security and investor confidence.<\/p>\n
The report also singles out BitMine, which has accumulated millions of dollars worth of ether as part of a corporate treasury strategy. Culper argues the company\u2019s valuation is heavily tied to the price of ETH and could face significant downside if the cryptocurrency continues to struggle.<\/p>\n
Culper\u2019s report also highlights recent on-chain transactions from wallets associated with Buterin, arguing that the Ethereum co-founder has sold tens of thousands of ETH this year, which the firm says undermines bullish narratives around the asset.<\/p>\n
\u201cVitalik is selling, while bulls like Tom Lee are clueless as to ETH\u2019s new reality,\u201d the report said. \u201cWe\u2019re with Vitalik.\u201d<\/p>\n
Culper also pushed back on bullish interpretations of rising Ethereum transaction counts and address activity, arguing that some of the increase may stem from spam-like on-chain activity such as address-poisoning or dusting transactions rather than organic user growth.<\/p>\n
The short thesis arrives amid a period of volatility for crypto markets, with Ether and other major digital assets facing renewed scrutiny over their long-term economic models as scaling upgrades and layer-2 adoption reshape the blockchain ecosystem.<\/p>\n
<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"
Short-selling firm Culper Research says it has taken a bearish position against Ethereum\u2019s native token and companies closely tied to it, arguing that the blockchain\u2019s economic model is deteriorating following…<\/p>\n","protected":false},"author":1,"featured_media":2167,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-23326","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency"],"_links":{"self":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/23326","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/comments?post=23326"}],"version-history":[{"count":1,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/23326\/revisions"}],"predecessor-version":[{"id":23327,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/23326\/revisions\/23327"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media\/2167"}],"wp:attachment":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media?parent=23326"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/categories?post=23326"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/tags?post=23326"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}