Hidden "Death Spiral" Risk! Ethereum and Bitmine targeted by short-selling institutions

Ethereum is set to undergo a series of major technical upgrades this year, which are highly anticipated as long-term bullish factors. However, the intimidating short-selling firm Culper Research believes that the Ethereum economic model is severely broken and hidden with a “death spiral” risk, and has released a report shorting Ether and Bitmine (BMNR).
This short attack by Culper Research has become the most discussed topic in the crypto community—whether they are bearish or mistaken.

On Thursday, Culper Research published a short report revealing their short positions in Ethereum and other Ethereum-related stocks like Bitmine. The firm pointed out that the “Fusaka upgrade” in December last year led to an oversupply of block space and a significant drop in transaction fees. Since validators’ income partly depends on these fees, staking yields have also shrunk, severely damaging the Ethereum economic model.

Culper Research warns that such changes could create a “vicious cycle”: as validator rewards continue to decline, market participation in staking will decrease, jeopardizing the security of the Ethereum network.
The report further cites Lookonchain data indicating that Ethereum co-founder Vitalik Buterin has sold nearly 20,000 ETH this year, estimated to be worth about $40 million at current prices. The report states:

Even Vitalik is offloading, while die-hard bulls like Tom Lee are still living in delusion, oblivious to the new reality facing Ether.

This time, we choose to stand with Vitalik.

Earlier, Bitmine, a reserve company for Ether, CEO Tom Lee, emphasized that the number of Ethereum transactions and active addresses continues to rise, indicating strong fundamentals. However, Culper Research counters that these data are misleading, and that the so-called “explosion of activity” is largely driven by “address poisoning attacks.”
According to Culper Research estimates, since the Fusaka upgrade, Ethereum transaction fees have dropped by about 90%. The report mentions:

Following Tom Lee’s logic, if Ethereum’s actual utility isn’t improving, it means Ether has fallen into a “death spiral.” We firmly believe this is the current scenario.

Additionally, this short report also sharply targets one of the world’s largest Ethereum enterprise buyers, Bitmine.