Culper Research Discloses Short Position on Ethereum Following Fusaka Upgrade

Culper Research has disclosed a short position in Ethereum (ETH) and several ETH-linked securities, including BitMine Immersion Technologies, citing concerns that the December 2025 Fusaka upgrade weakened Ethereum's tokenomics by lowering transaction fees and ETH burn, according to its report. The firm also pointed to increased address poisoning and dust attacks on Ethereum, claimed that spam transactions now represent a large share of on-chain activity, and questioned the long-term strength of validator rewards. Ethereum supporters pushed back, citing Ethereum Daily data that gas price declines were an intended outcome of Fusaka, daily ETH burn in February 2026 still exceeded the roughly 0.8% annual inflation rate, non-spam wallets grew about 12% year over year in the first quarter of 2026, active addresses have risen, block rewards remain near two ETH per block, validator returns are estimated at 4–5%, and around 19 million ETH is staked, representing about two-thirds of the securing supply. SoSoValue data show that as of March 5, US spot Ethereum ETFs saw around $90.94 million in daily net outflows, with cumulative net inflows near $11.71 billion and total ETF net assets close to $11.99 billion while ETH traded around $2,090, figures that critics say underscore weaker demand while supporters argue such short-term flows are normal in volatile markets.