Culper Research shorts ether and BitMine, warns of 'death spiral' risk

Culper Research is betting against ether (ETH) and ETH-linked stocks such as BitMine (BMNR), arguing the network’s economics worsened after Ethereum’s December 2025 Fusaka upgrade. The firm said the upgrade flooded the network with excess blockspace, sharply lowering transaction fees and weakening staking yields.

Culper warned that lower validator income could trigger a negative feedback loop, reducing staking demand and network security. The report highlighted that co-founder Vitalik Buterin sold nearly 20,000 ETH this year—roughly $40 million at current prices—and added, "Vitalik is selling, while bulls like Tom Lee are clueless as to ETH’s new reality." "We’re with Vitalik," it said.

The firm pushed back on Tom Lee’s bullish point that rising transaction counts and active addresses show stronger fundamentals, saying much of the activity surge stems from address poisoning attacks and estimating fees have dropped roughly 90% since the upgrade.

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