Why Is a Research Group Shorting Ethereum? Vitalik’s Father Slams Firm That Denounced Tom Lee’s 'Misleading' Bullish Thesis

Key Takeaways

• Culper Research said it has taken a abbreviated presumption successful Ethereum.

• Tom Lee’s bullish thesis challenged.

• Backlash from the Ethereum community.

A probe steadfast known for activistic abbreviated reports has taken purpose astatine Ethereum, arguing the world’s second-largest cryptocurrency is entering a “death spiral” owed to flawed tokenomics and declining web fundamentals.

The claims person triggered backlash from members of the Ethereum community, including the begetter of co-founder Vitalik Buterin.

Culper Research said it had established a abbreviated presumption successful Ethereum and published a thread connected X outlining wherefore it believes the crypto could autumn further.

The firm’s reasoning included:

• Wallet maturation inflated by dusting attacks

• Transaction maturation driven by dusting activity

• Gas bounds summation led to a crisp interest decline

• Validator revenues falling

• Growing contention from Solana

• Vitalik Buterin selling ETH

• “Broken” tokenomics

Culper Research said its investigation of Ethereum’s on-chain information from January 2025 done February 2026 suggests that caller maturation metrics cited by bullish analysts whitethorn beryllium misleading.

The steadfast argued that overmuch of the evident enlargement successful Ethereum wallet enactment is driven by “address poisoning” oregon “wallet dusting” attacks alternatively than genuine idiosyncratic adoption.

According to Culper, astir 95% of maturation successful caller wallets since the Fusaka upgrade tin beryllium attributed to recently created dusting wallets.

The radical besides claimed that specified enactment accounts for much than fractional of Ethereum’s transaction maturation and present represents astir 22.5% of each ETH transactions.

Culper further pointed to Ethereum’s caller state bounds summation to betwixt 45 cardinal and 60 million, introduced to grow layer-1 capableness aft the Fusaka upgrade.

While Ethereum co-founder Vitalik Buterin and protocol researchers had estimated transaction fees would autumn 10% to 30%, the steadfast said state fees person alternatively dropped astir 90%.

Lower fees, Culper said, person reduced validator revenue, claiming tips per state are present 40% to 50% lower.

The steadfast besides suggested Ethereum faces increasing competitory unit from rival blockchain Solana, citing faster developer maturation and higher decentralized speech trading volumes.

Culper additionally pointed to caller Ethereum income by Buterin, noting helium announced successful January plans to merchantability 16,384 ETH to money what helium described arsenic an “austerity period” for the ETH Foundation.

The study claims helium has sold much than 19,000 ETH since then, which Culper argued reflects declining assurance successful Ethereum’s token economics.