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<\/p>\n","protected":false},"excerpt":{"rendered":"Culper Research disclosed a short position in ether and ETH-linked securities on Thursday, arguing that Ethereum\u2019s post-upgrade economics have deteriorated enough to put sustained downside pressure on the token. The firm pointed directly at Ethereum\u2019s December 2025 Fusaka upgrade, and at Vitalik Buterin\u2019s recent sales, as evidence that \u201cETH is going lower.\u201d<\/p>\n
\u201cNEW: We are short Ether ETH, and ETH-linked securities, incl. BMNR,\u201d Culper Fusaka upgrade. Vitalik knows it and is selling, while ETH\u2019s most ardent bull, Tom Lee, is throwing good money after bad.\u201d<\/p>\n
Culper\u2019s core claim is that Fusaka\u2019s L1 scaling changes altered Ethereum\u2019s demand-fee dynamic more dramatically than expected. The firm pointed to a gas limit increase \u201c45 to 60M\u201d that it said was intended to scale Ethereum\u2019s base layer, alongside estimates that \u201cVitalik and PTG\u201d believed fees would drop 10% to 30%. Culper contends the realized outcome was far more severe: \u201cIn reality, gas fees fell ~90%,\u201d it wrote, adding that Ethereum\u2019s leadership and validators \u201cmiscalculated L1 demand elasticity by 3-9x based on outdated math (pre-EIP-1559 and pre-L2s).\u201d<\/p>\n
That fee compression matters, Culper argues, because it ripples into validator economics and staking incentives. \u201cFurther, the gas-limit increase killed $ETH validators, who are now seeing 40-50% lower tips per gas,\u201d Culper wrote, claiming that lower yields reduce demand for staking and \u201chigh-value activity,\u201d undermining the institutional adoption narrative. \u201cThe flywheel is now running in reverse.\u201d<\/p>\n
The thread frames Tom Lee and BMNR as a prominent counterweight in the ETH bull camp, then attempts to dismantle his post-upgrade read-through. Culper said Lee has defended ether by claiming: \u201cETH is not in a death spiral because utility is going up.\u201d According to Culper, Lee cited spikes in active addresses and transaction counts after Fusaka as evidence of \u201cstrengthening fundamentals\u201d and institutional adoption.<\/p>\n
Culper\u2019s rebuttal is blunt and largely definitional: \u201cBy Lee\u2019s own logic, if ETH activity does NOT reflect increased utility and strengthening fundamentals, then $ETH would be in a death spiral,\u201d it wrote. \u201cOur research says this is exactly what\u2019s happening.\u201d<\/p>\n
To explain the activity surge, Culper said its analysis of on-chain data from January 2025 through February 2026 suggests much of the growth was not organic usage, but a wave of low-value address poisoning and wallet dusting enabled by cheaper blockspace. \u201cPost-Fusaka: 95% of growth in new wallets is explained by newly-created \u2018dusting\u2019 wallets,\u201d Culper wrote, adding that poisoning attacks have \u201cmore than 3x\u2019ed,\u201d that poisoning explains \u201c>50% of $ETH transaction growth,\u201d and that it now constitutes \u201c22.5% of all ETH transactions.\u201d<\/p>\n
Culper said it validated the phenomenon firsthand, claiming it set up two new wallets, transferred between them, and was targeted by poisoning attacks \u201cwithin 5 minutes,\u201d while asserting that poisoning losses are \u201calready pacing >8x higher than pre-Fusaka.\u201d<\/p>\n
The firm also tried to tie its tokenomics thesis to Buterin\u2019s recent sales activity, portraying it as informed selling rather than routine treasury management.<\/p>\n
\u201cThis is why, we think, Vitalik is selling ETH hand over fist. On January 30, Vitalik pre-announced he\u2019d sell 16,384 ETH to fund the Foundation\u2019s \u2018austerity period.\u2019 Since then, he\u2019s sold over 19,300 ETH and counting,\u201d Culper wrote. \u201cHe knows what Tom Lee doesn\u2019t: ETH tokenomics are broken.\u201d<\/p>\n
Culper closed by broadening the bear case into a competition story, claiming ether is losing share to Solana and to Ethereum\u2019s own L2s, and likening ETH\u2019s current position to incumbents that led early eras before being displaced.<\/p>\n
At press time, ETH traded at $2,080.<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
Culper Research disclosed a short position in ether and ETH-linked securities on Thursday, arguing that Ethereum\u2019s post-upgrade economics have deteriorated enough to put sustained downside pressure on the token. The firm pointed directly at Ethereum\u2019s December 2025 Fusaka upgrade, and at Vitalik Buterin\u2019s recent sales, as evidence that \u201cETH is going lower.\u201d \u201cNEW: We are…<\/p>\n","protected":false},"author":1,"featured_media":10448,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[143],"tags":[4892,64,144,145,66,88,89],"class_list":["post-10447","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ethereum","tag-culper-research","tag-eth","tag-eth-news","tag-eth-price","tag-ethereum","tag-ethereum-news","tag-ethereum-price"],"_links":{"self":[{"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/posts\/10447","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/comments?post=10447"}],"version-history":[{"count":0,"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/posts\/10447\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/media\/10448"}],"wp:attachment":[{"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/media?parent=10447"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/categories?post=10447"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/tags?post=10447"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}