Short-selling firm Culper shorts Ethereum and Tom Lee's BitMine, citing the risk of a "death spiral."

CoinNetwork · 2026-03-05T21:25:07+00:00

Short-selling firm Culper Research believes that Ethereum and related stocks will decline due to the Fusaka upgrade causing an oversupply of block space, leading to a significant drop in transaction fees, which impacts validator earnings and may trigger security risks. Additionally, news of Ethereum co-founder Vitalik Buterin selling ETH has raised doubts, and BitMine is expected to face substantial unrealized losses.

CoinNetwork

2026-03-05 21:25:07

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Short-selling firm Culper Research bets on the decline of Ethereum (ETH) and related stocks such as BitMine (BMNR), believing that the Fusaka upgrade led to an oversupply of block space on Ethereum, damaging the token’s economic model. This has resulted in approximately a 90% drop in transaction fees, reduced validator staking rewards, and could create a negative security feedback loop. The report also cites Ethereum co-founder Vitalik Buterin’s sale of 20,000 ETH this year and questions the optimistic data from BitMine’s Tom Lee, suggesting that part of the surge in trading volume was due to responding to pump-and-dump schemes. Data shows that BitMine’s treasury holds 4.4 million ETH, with an estimated unrealized loss of $7.4 billion.

ETH-4.28%

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