Culper Shorts Ethereum, Says Buterin Selling | Crypto News
Culper Research disclosed a short place in ether and ETH-linked securities on Thursday, arguing that Ethereum’s post-upgrade economics have deteriorated enough to put sustained draw back strain on the token. The firm pointed immediately at Ethereum’s December 2025 Fusaka improve, and at Vitalik Buterin’s current gross sales, as evidence that “ETH is going lower.”
“NEW: We are short Ether ETH, and ETH-linked securities, incl. BMNR,” Culper wrote on X. “We think ETH tokenomics are impaired following the December 2025 Fusaka upgrade. Vitalik knows it and is selling, while ETH’s most ardent bull, Tom Lee, is throwing good money after bad.”
Why Culper Is Shorting Ethereum
Culper’s core declare is that Fusaka’s L1 scaling modifications altered Ethereum’s demand-fee dynamic more dramatically than anticipated. The firm pointed to a fuel restrict increase “45 to 60M” that it said was supposed 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 far more extreme: “In reality, gas fees fell ~90%,” it wrote, including that Ethereum’s management and validators “miscalculated L1 demand elasticity by 3-9x based on outdated math (pre-EIP-1559 and pre-L2s).”
That charge compression issues, Culper argues, because it ripples into validator economics and staking incentives. “Further, the gas-limit increase killed $ETH validators, who are now seeing 40-50% lower tips per gas,” Culper wrote, claiming that decrease yields cut back demand for staking and “high-value activity,” undermining the institutional adoption narrative. “The flywheel is now running in reverse.”
The thread frames Tom Lee and BMNR as a outstanding counterweight in the ETH bull camp, then makes an attempt to dismantle his post-upgrade read-through. Culper said Lee has defended ether by claiming: “ETH is not in a death spiral because utility is going up.” According to Culper, Lee cited spikes in energetic addresses and transaction counts after Fusaka as evidence of “strengthening fundamentals” and institutional adoption.
Culper’s rebuttal is blunt and largely definitional: “By Lee’s own logic, if ETH activity does NOT reflect increased utility and strengthening fundamentals, then $ETH would be in a death spiral,” it wrote. “Our research says this is exactly what’s happening.”
To clarify the exercise surge, Culper said its analysis of on-chain data from January 2025 through February 2026 suggests a lot of the growth was not natural usage, but a wave of low-value handle poisoning and pockets dusting enabled by cheaper blockspace. “Post-Fusaka: 95% of growth in new wallets is explained by newly-created ‘dusting’ wallets,” Culper wrote, including that poisoning assaults have “more than 3x’ed,” that poisoning explains “>50% of $ETH transaction growth,” and that it now constitutes “22.5% of all ETH transactions.”
Culper said it validated the phenomenon firsthand, claiming it set up two new wallets, transferred between them, and was focused by poisoning assaults “within 5 minutes,” while asserting that poisoning losses are “already pacing >8x higher than pre-Fusaka.”
Vitalik Is Selling
The firm also tried to tie its tokenomics thesis to Buterin’s current gross sales exercise, portraying it as informed promoting somewhat than routine treasury management.
“This is why, we think, Vitalik is selling ETH hand over fist. On January 30, Vitalik pre-announced he’d sell 16,384 ETH to fund the Foundation’s ‘austerity period.’ Since then, he’s sold over 19,300 ETH and counting,” Culper wrote. “He knows what Tom Lee doesn’t: ETH tokenomics are broken.”
Culper closed by broadening the bear case into a competitors story, claiming ether is shedding share to Solana and to Ethereum’s own L2s, and likening ETH’s current place to incumbents that led early eras before being displaced.
At press time, ETH traded at $2,080.
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