Culper Analysis disclosed a brief place in ether and ETH-linked securities on Thursday, arguing that Ethereum’s post-upgrade economics have deteriorated sufficient to place sustained draw back stress on the token. The agency pointed immediately at Ethereum’s December 2025 Fusaka improve, and at Vitalik Buterin’s latest gross sales, as proof that “ETH goes decrease.”
“NEW: We’re quick Ether ETH, and ETH-linked securities, incl. BMNR,” Culper wrote on X. “We expect ETH tokenomics are impaired following the December 2025 Fusaka improve. Vitalik is aware of it and is promoting, whereas ETH’s most ardent bull, Tom Lee, is throwing good cash after unhealthy.”
Why Culper Is Shorting Ethereum
Culper’s core declare is that Fusaka’s L1 scaling adjustments altered Ethereum’s demand-fee dynamic extra dramatically than anticipated. The agency pointed to a fuel restrict improve “45 to 60M” that it mentioned was meant to scale Ethereum’s base layer, alongside estimates that “Vitalik and PTG” believed charges would drop 10% to 30%. Culper contends the realized consequence was much more extreme: “In actuality, fuel charges fell ~90%,” it wrote, including that Ethereum’s management and validators “miscalculated L1 demand elasticity by 3-9x primarily based on outdated math (pre-EIP-1559 and pre-L2s).”
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That payment compression issues, Culper argues, as a result of it ripples into validator economics and staking incentives. “Additional, the gas-limit improve killed $ETH validators, who at the moment are seeing 40-50% decrease ideas per fuel,” Culper wrote, claiming that decrease yields cut back demand for staking and “high-value exercise,” undermining the institutional adoption narrative. “The flywheel is now operating in reverse.”
The thread frames Tom Lee and BMNR as a distinguished counterweight within the ETH bull camp, then makes an attempt to dismantle his post-upgrade read-through. Culper mentioned Lee has defended ether by claiming: “ETH shouldn’t be in a dying spiral as a result of utility goes up.” Based on Culper, Lee cited spikes in lively addresses and transaction counts after Fusaka as proof of “strengthening fundamentals” and institutional adoption.
Culper’s rebuttal is blunt and largely definitional: “By Lee’s personal logic, if ETH exercise does NOT mirror elevated utility and strengthening fundamentals, then $ETH can be in a dying spiral,” it wrote. “Our analysis says that is precisely what’s occurring.”
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To elucidate the exercise surge, Culper mentioned its evaluation of on-chain knowledge from January 2025 by February 2026 suggests a lot of the expansion was not natural utilization, however a wave of low-value deal with poisoning and pockets dusting enabled by cheaper blockspace. “Submit-Fusaka: 95% of progress in new wallets is defined by newly-created ‘dusting’ wallets,” Culper wrote, including that poisoning assaults have “greater than 3x’ed,” that poisoning explains “>50% of $ETH transaction progress,” and that it now constitutes “22.5% of all ETH transactions.”
Culper mentioned it validated the phenomenon firsthand, claiming it arrange two new wallets, transferred between them, and was focused by poisoning assaults “inside 5 minutes,” whereas asserting that poisoning losses are “already pacing >8x greater than pre-Fusaka.”
Vitalik Is Promoting
The agency additionally tried to tie its tokenomics thesis to Buterin’s latest gross sales exercise, portraying it as knowledgeable promoting slightly than routine treasury administration.
“Because of this, we expect, Vitalik is promoting ETH hand over fist. On January 30, Vitalik pre-announced he’d promote 16,384 ETH to fund the Basis’s ‘austerity interval.’ Since then, he’s offered over 19,300 ETH and counting,” Culper wrote. “He is aware of what Tom Lee doesn’t: ETH tokenomics are damaged.”
Culper closed by broadening the bear case into a contest story, claiming ether is dropping share to Solana and to Ethereum’s personal L2s, and likening ETH’s present place to incumbents that led early eras earlier than being displaced.
At press time, ETH traded at $2,080.
Featured picture created with DALL.E, chart from TradingView.com
