Culper Research shorts Ethereum, cites 90% fee drop and Buterin sales

Culper Research shorted Ethereum (ETH) and ETH‑linked securities. The firm says post‑Fusaka tokenomics broke and will keep pushing ETH lower.

Culper disclosed the short and tied its view to the December 2025 Fusaka L1 changes, Vitalik’s recent sales, and what it calls distorted post‑upgrade activity.

• Fees collapsed after Fusaka. Culper says Ethereum raised the gas limit to “45–60M,” expected fees to fall 10–30%, but “in reality, gas fees fell ~90%” link. Background on the upgrade is here.
• Validator economics weakened. Tips per gas are “40–50%” lower, cutting staking yields and disincentivizing “high‑value activity,” Culper claims link. Context on staking trends is here.
• On‑chain “growth” is low‑value traffic. Culper’s analysis (Jan 2025–Feb 2026) attributes “95%” of new wallets to dusting, says poisoning attacks “>3x,” explain “>50%” of tx growth, and now make up “22.5%” of all ETH transactions. The team reports reproducing poisoning within 5 minutes on fresh wallets and says losses are “>8x” pre‑Fusaka link.
• Tom Lee and BMNR are on the bull side. Culper cites Lee’s defense that “utility is going up,” then argues the activity doesn’t reflect real utility link.
• Vitalik is selling. Culper ties its thesis to Buterin’s recent sales, noting he pre‑announced 16,384 ETH on Jan 30 and has sold “over 19,300 ETH” since.
• Competition intensifies. Culper says ETH is losing share to Solana (SOL) and to Ethereum L2s link.

“ETH is going lower,” the firm wrote, adding that ETH’s leadership “miscalculated L1 demand elasticity” and that “the flywheel is now running in reverse” link.