Just read an interesting report from Culper Research — they are heavily betting on falling ETH prices and argue that Ethereum faces serious problems after the Fusaka upgrade. The network was allegedly flooded with too much blockspace, and transaction fees have dropped by about 90%.

The problem: validators earn a large part of their rewards from these fees. Less fee revenue means lower staking yields, which could in turn threaten demand for staking and network security — a real downward spiral. Culper also points out that Vitalik Buterin sold nearly 20,000 ETH this year (currently worth around $46 million), while bulls like Tom Lee from BitMine remain optimistic.

Since July, BitMine has accumulated about 4.4 million ETH as part of their treasury strategy. That’s a massive position — the company has accumulated nearly 5% of all Ether. The only problem: at current prices of $2,320 per ETH, they are sitting on unrealized losses of approximately $7.4 billion. Culper argues that the increased transaction volumes Lee points to mostly stem from address poisoning attacks — so fraud, not genuine network usage.

The short thesis is actually logical: either usage is truly increasing — then ETH benefits. Or it’s not really increasing — then ETH has a real problem. In any case, BitMine accumulated a significant amount of ETH before this report came out. It will be interesting to see how this develops.