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- Ethereum is underperforming Bitcoin as inflation and Treasury yields rise.
- Wintermute believes current macro conditions are unfavorable for ETH.
- Tom Lee remains bullish long term despite pressure from oil prices and ETF outflows.
Ethereum is facing renewed pressure as rising inflation, higher Treasury yields, and surging oil prices reshape investor sentiment across global markets. Crypto trading firm Wintermute says Ethereum may be particularly vulnerable in the current environment, calling it “the wrong asset for this macro.”
The comments come during a difficult stretch for crypto markets, with ETH lagging behind Bitcoin and institutional flows turning negative. At the same time, prominent market analyst Tom Lee continues to argue that Ethereum’s long-term fundamentals remain intact despite short-term weakness.
Ethereum Struggles as Macro Pressure Builds
According to Wintermute’s latest market commentary, Ethereum fell more than 10% over the past week, underperforming Bitcoin in both spot and derivatives trading. The weakness followed hotter-than-expected US inflation data, with April CPI reportedly rising 3.8% year-over-year.
Markets also reacted to the 10-year US Treasury yield climbing to its highest level since late 2025. Investors are increasingly pricing in the possibility that the Federal Reserve could keep interest rates elevated for longer — or even consider another rate hike later this year.
Wintermute argued that Ethereum tends to react more negatively to tightening liquidity conditions because it is closely tied to growth-driven narratives such as decentralized finance, tokenization, and blockchain expansion. In risk-off environments, investors often rotate toward assets perceived as safer or more defensive, including Bitcoin.
Tom Lee Blames Rising Oil Prices
Tom Lee recently offered another explanation for Ethereum’s weakness: oil.
In posts shared on X, Lee said ETH’s inverse correlation with crude oil prices had reached extreme levels. According to him, Ethereum declined steadily during the same six-week period in which oil prices climbed sharply.
Despite the short-term pressure, Lee maintained a bullish long-term stance on Ethereum. He pointed to tokenization and artificial intelligence integration as major themes that could boost blockchain demand through 2026.
Lee also recently declared that “Crypto Spring” had begun, arguing that Ethereum’s recent multi-month gains historically signal the end of broader bear market conditions.
Institutional Flows Raise Concerns
Wintermute also highlighted signs of weakening institutional appetite for crypto exposure. Bitcoin spot ETFs reportedly saw roughly $1 billion in outflows during the week, while Ether ETFs lost an additional $255 million.
The trading firm suggested many institutional investors are currently “selling into strength” instead of aggressively accumulating during rallies.
Still, Wintermute noted several long-term indicators remain positive for digital assets, including lower exchange reserves, continued accumulation by long-term holders, and rising adoption of tokenized Treasury products.
The broader crypto market remains divided over what comes next. Some analysts believe macroeconomic pressure could keep risk assets subdued for months, especially if borrowing costs remain elevated.
Also Read: Ethereum at Risk? ETH Could Crash 19% as DeFi Activity Collapses
Crypto analyst Benjamin Cowen recently warned Bitcoin could revisit levels below $60,000 and potentially fall further if economic conditions worsen.
For now, Ethereum sits at the center of a growing debate: whether the asset is simply caught in a temporary macro storm — or whether the market is entering another prolonged period of weakness.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
