New York-based research firm Culper Research has released a report stating that it has established short positions on Ethereum (ETH) and related assets, predicting that its price will continue to decline. The firm specifically targets BitMine, the largest mining company in the Ethereum ecosystem, arguing that its business prospects have been severely impacted by changes in the network's economic model.
The report notes that the upcoming Fusaka upgrade, set to be implemented in December 2025, significantly reduces transaction fees. Since a portion of validator income relies on transaction fees, this change directly compresses staking yields and weakens the incentive mechanisms for network participants. Culper Research further claims that Ethereum co-founder Vitalik Buterin has recognized this structural issue and has begun to reduce his holdings of ETH assets.
The firm also refutes the views of well-known bullish analyst Tom Lee, arguing that his interpretation of rising active addresses and transaction volumes as indicators of network health is misleading. Culper's analysis points out that a significant portion of the recent increase in activity stems from “address pollution attacks” — a phishing tactic where attackers send small transactions to user wallets, enticing them to copy addresses containing malicious code. This behavior artificially inflates on-chain data, masking the underlying weakness in real usage demand.
According to Culper's estimates, since the Fusaka upgrade, Ethereum's average transaction fees have dropped by approximately 90%. The report concludes by emphasizing that, in the face of profound changes to the network's economic foundation, market optimism may be disconnected from reality, and the founder's actions may be more aligned with true trends.