Ethereum may be facing mounting structural risks as institutional capital increasingly consolidates around Bitcoin, according to a new report by 10x Research. Analysts said Ether (ETH) could serve as a strategic hedge short for investors seeking to protect their portfolios amid a cautious digital asset market.
The report emphasized that institutional investors continue to favor Bitcoin as the primary treasury asset, while Ethereum-focused firms are showing signs of liquidity exhaustion. The study warned that “digital asset treasury” narratives built around ETH once used to attract institutional accumulation are now breaking down due to waning capital flows and opaque private investment disclosures.
Shorting Ether could be a smart hedge against Bitcoin,” 10x Research analysts wrote, noting that Ether’s recent market structure and technical patterns suggest downside risks if the $3,000 support level fails. The weekly stochastics are flashing a clear topping pattern, and the multi-year wedge formation has revealed a false breakout, they added.
Treasury concentration raises red flags
10x Research identified BitMine as the largest Ether-focused treasury firm, holding roughly 3.3 million ETH, around 70% of all Ether held by such companies. SharpLink follows with 859,853 ETH, while Bit Digital holds 150,244 ETH. In total, the top 15 Ethereum treasuries control about 4.7 million ETH.
The report described how these firms previously facilitated institutional accumulation of ETH “at par” before distributing it to retail buyers at a premium a cycle that helped drive price momentum but may no longer be sustainable amid tighter liquidity and waning institutional demand.
Cautious outlook despite bullish voices
Despite the shifting dynamics, BitMine chair Tom Lee remains optimistic, predicting that Ether could still hit $10,000 this year. He argued that ETH’s long-term fundamentals remain strong and that the asset has been building a “solid base” since 2021.
However, broader market sentiment has turned cautious after the Oct. 10 crash the largest liquidation event on record, wiping out nearly $19 billion in crypto positions. Ether and other digital assets have since struggled to recover momentum as traders weigh macro risks and a weakening appetite for crypto ETFs.