Wall Street Shorts ETH: Vitalik Knew and Front-Ran, Tom Lee Still Deluded

Odaily星球日报2026-03-06 tarihinde yayınlandı2026-03-06 tarihinde güncellendi

Özet

Wall Street short-selling firm Culper Research has initiated a short position on ETH and related securities, including Bitmine (BMNR). The firm argues that Ethereum’s token economic model was fundamentally broken following the Fusaka upgrade in December 2025, which increased the gas limit from 45M to 60M. Contrary to initial expectations of a 10–30% drop, gas fees fell by approximately 90%, leading to a surge in low-value on-chain activity such as address poisoning and dust attacks. These activities now account for a significant portion of transaction growth and new wallet creation, distorting metrics often cited as signs of organic adoption. Culper alleges that Vitalik Buterin and core developers severely miscalculated Layer 1 demand elasticity using outdated models, overestimating real demand by 3–9 times. The report claims Vitalik is aware of these issues and has been selling ETH, exceeding previously announced sales targets. Meanwhile, Tom Lee of Bitmine continues to defend ETH based on misleading on-chain activity growth. Additionally, validators are earning 40–50% less in tips per unit of gas, reducing staking yields and potentially weakening institutional interest. Ethereum is also losing developer and market share to Solana, which has attracted major institutional DeFi adoption. Culper concludes that Ethereum’s tokenomics are irreparably damaged and expects further price declines.

This article is from:Culper Research

Compiled by | Odaily Planet Daily (@OdailyChina); Translator | Azuma (@azuma_eth)

Editor's Note: On March 6, Wall Street short-selling firm Culper Research suddenly published an article announcing it is shorting ETH and related securities like BMNR. Culper Research's logic is that Vitalik and other developers miscalculated Ethereum's demand elasticity before the Fusaka upgrade, leading to the upgrade damaging ETH's token economic model. Culper Research also mentioned that Vitalik is well aware of this and is actively front-running with practical actions, while the deluded Tom Lee is heading towards a dead end.

In response to the firm's massive shorting, Vitalik himself and Tom Lee have not yet responded, but Vitalik's father, Dmitry Buterin (dima.eth), responded by saying: "When you see the phrase 'Vitalik knows this and is selling,' you don't need to read further. They are clowns craving attention, not researchers."

Below is the original content from Culper Research, compiled by Odaily Planet Daily. Compiling this article does not mean we agree with Culper Research's views, but is only to present the perspective and market煽动 of some Wall Street institutions regarding ETH.

Latest disclosure: We are shorting ETH and ETH-related stocks, including Bitmine (BMNR).

We believe that after the Fusaka upgrade in December 2025, ETH's token economic model has been broken. Vitalik knows this and is selling; while ETH's staunchest bull, Tom Lee, continues to add ineffective investments. ETH will continue to fall.

Tom Lee's Bitmine has consistently defended ETH, claiming that "ETH is not in a death spiral due to increasing utility." He cited the surge in active addresses and transaction numbers on Ethereum after the Fusaka upgrade as evidence of so-called "improved fundamentals" and institutional adoption, but he is completely wrong.

By Tom Lee's own logic, if on-chain activity on Ethereum does not reflect real usage growth and fundamental improvement, then ETH is indeed in a death spiral.

And our research shows that this is exactly what is happening.

We conducted a comprehensive analysis of on-chain data from January 2025 to February 2026, and the results show that what Lee calls "institutional adoption driving Ethereum's activity growth" can actually be explained by a large number of low-value address poisoning and wallet dusting behaviors. These behaviors were triggered by the excess block space after the Fusaka upgrade.

After the Fusaka upgrade:

  • 95% of new wallet growth comes from newly created dust addresses;
  • Address poisoning attacks have increased by more than 3 times;
  • Poisoning behavior explains over 50% of Ethereum's transaction growth;
  • Poisoning transactions now account for 22.5% of all Ethereum transactions;

The Fusaka upgrade increased the gas limit from 45M to 60M, aiming to expand Ethereum Layer1 capacity. Vitalik and the protocol team previously predicted gas fees would drop by 10%–30%, but the reality is that gas fees dropped by about 90%.

Vitalik and the validators made a serious miscalculation in Layer1 demand elasticity. They used outdated mathematical models (based on assumptions from before EIP-1559 and before Layer2 emerged), thereby overestimating Layer1 demand by 3 to 9 times. This is also why we believe Vitalik is selling large amounts of ETH. On January 30, Vitalik announced in advance that he would sell 16,384 ETH to fund the Ethereum Foundation's "austerity period," but since then, he has sold over 19,300 ETH and is still selling.

Vitalik understands something Tom Lee does not — ETH's token economic model has been broken.

We personally documented Ethereum network address poisoning. We created two new addresses and transferred between them. Within 5 minutes, we were subjected to an address poisoning attack. We encourage readers to verify this phenomenon themselves. Currently, the rate of losses due to poisoning attacks is 8 times higher than before the Fusaka upgrade.

Furthermore, the increase in the gas limit has hit Ethereum's validators群体, as validators now see a 40%–50% decline in tip income per unit of gas. Falling yields will weaken staking demand and high-value transaction activity, further undermining institutional adoption. This flywheel has now started to reverse.

Meanwhile, Ethereum continues to lose market share to Solana and its own Layer2 networks.

  • Solana developer count grew 29% in 2025;
  • Ethereum developer growth was only 6%;
  • Talent is leaving the Ethereum ecosystem;
  • Institutions like Visa and Citigroup have chosen Solana for DeFi applications;
  • Solana DEX trading volume is already more than double that of Ethereum.

In the dot-com bubble era, Netscape and Nokia dominated the market for over 10 years, but the real winners were Google and Apple. We believe Ethereum's situation is similar — we think Ethereum's token economic model has collapsed, Tom Lee is trapped in his own position, and ETH's price will continue to fall.

İlgili Sorular

QWhat is the main argument presented by Culper Research for shorting ETH?

ACulper Research argues that the Fusaka upgrade in December 2025 broke Ethereum's token economic model by significantly increasing block space, which caused gas fees to drop by ~90% instead of the projected 10-30%. This led to a surge in low-value spam activities (address poisoning and dusting attacks) that artificially inflate on-chain metrics, while validators' earnings and institutional adoption declined. They claim Vitalik Buterin is aware of this and selling ETH, while Tom Lee remains incorrectly bullish.

QWhat specific on-chain data does Culper Research cite to support their claim that Ethereum's activity growth is not organic?

ACulper Research cites data showing that 95% of new wallet growth post-Fusaka comes from dust addresses, address poisoning attacks increased over 3x, poisoning explains over 50% of transaction growth, and poisoning transactions now constitute 22.5% of all Ethereum transactions. They also note that gas fees dropped ~90% due to miscalculated demand elasticity.

QWhy does Culper Research claim Vitalik Buterin is selling ETH, and what evidence do they provide?

ACulper Research claims Vitalik is selling ETH because he knows the tokenomics are broken post-Fusaka. They note he announced selling 16,384 ETH on January 30 to fund Ethereum Foundation's 'austerity period' but has since sold over 19,300 ETH and continues selling, indicating insider awareness of the model's failure.

QHow does Culper Research argue that the Fusaka upgrade negatively impacted Ethereum validators?

AThey state that the gas limit increase from 45M to 60M reduced validators' tip earnings per unit of gas by 40-50%, lowering yields and weakening staking demand and high-value transaction activity, which further undermines institutional adoption.

QWhat comparisons does Culper Research make between Ethereum and Solana, and what trends do they highlight?

ACulper Research highlights Solana's growth compared to Ethereum: Solana developer count increased 29% in 2025 vs. Ethereum's 6%, institutions like Visa and Citigroup chose Solana for DeFi, Solana DEX volume is over 2x Ethereum's, and talent is leaving Ethereum. They analogize Ethereum to past giants like Netscape and Nokia that were disrupted.

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