Ether’s Struggles Against Bitcoin: A Historic Low
Ether (ETH), the second-largest cryptocurrency by market capitalization, has recently experienced a significant decline in its relative performance compared to bitcoin (BTC). This downturn marks the most substantial underperformance of ether in a bull cycle against its larger counterpart since the inception of the Ethereum blockchain in 2015.
A detailed analysis of the ether to bitcoin ratio across various market cycles indicates a consistent trend of underperformance. The black line depicted in the accompanying chart illustrates the current cycle that commenced in November 2022, following the dramatic collapse of the crypto exchange FTX, which saw bitcoin plummet to approximately $15,500.
On Wednesday, the ether to bitcoin ratio fell below 0.0300, hitting a four-year low of 0.02993. This decline marks a notable drop from the previous low recorded on January 19, just a day prior to President Trump’s inauguration. Within this month alone, the ratio has declined by 15%, and it has experienced a staggering reduction of 44% over the past year.
As of now, bitcoin is trading around $105,000, having bounced back from a recent dip to $98,000 triggered by the launch of DeepSeek, a Chinese artificial intelligence (AI) program. In contrast, ether is currently priced at $3,202, indicating that it would need to rise to approximately $3,360 to recover from the adverse effects caused by the DeepSeek incident.
“My general take is that the ether to bitcoin ratio underperformance is more due to the strength of bitcoin rather than a weakness of ether,” stated Andre Dragosch, the head of research at Bitwise’s European desk. “Ether tends to suffer from what I call ‘middle child syndrome.’ It is not as scalable as other smart contract competitors like Solana (SOL), yet it doesn’t quite compete with bitcoin as the primary store of value.”
