Market maker Wintermute has declared that Ethereum is not the right investment in today’s economic climate, as the cryptocurrency experienced a 10.2% decline this week. The firm points to rising Treasury yields and re-accelerating inflation as key factors making ETH unattractive. The ETH/BTC ratio has slipped to approximately 0.0275, reflecting a broader trend of underperformance in both spot and derivatives markets. Wintermute notes that traders are shifting away from smart-contract platforms toward safer crypto assets. The current macroeconomic environment, characterized by higher real yields and persistent inflation, is hostile to long-duration assets like Ethereum, whose value depends on future fee growth from DeFi and other applications. The firm warns that even being long Bitcoin is a risky bet, as it assumes institutions will ignore rising yields and return to crypto markets. Wintermute emphasizes that crypto is now behaving like a high-beta extension of equity and credit risk, with AI-linked stocks and tokens absorbing available capital. This leaves digital assets in a state of high volatility but low spot demand, as ETF outflows and US selling pressure persist. The firm’s 2026 outlook suggests the traditional four-year crypto cycle is over, replaced by a regime driven by institutional flows and product infrastructure. Until ETF mandates broaden and major allocators reconsider crypto as macro collateral, both Bitcoin and Ethereum face headwinds. In this context, Ethereum’s combination of long duration, unproven fee growth, and fading narrative momentum makes it particularly vulnerable, according to Wintermute.