By Michael Scott
Experts express concern about Ethereum’s struggle to keep in step with rival crypto, Solana (SOL) and Bitcoin (BTC), in this cycle.
Ethereum cannot match the price recovery realized by rival crypto assets this cycle. Despite the celebrated arrival of spot Ether exchange-traded funds (ETFs), experts decry the failure to trigger a price rally in ETH.
ETH Struggle as Rivals Regain
Experts attribute the struggle to less loyalty among Ethereum investors than Bitcoin holders. Notably, the crypto market plunge witnessed on Sunday saw the ETH-to-BTC conversion ratio slip to its yearly low at 0.041, TradingView data shows. While the crypto assets – including Ether (ETH) – have regained a solid uptrend since then, the ETH-BTC ratio is at 0.04384 at press time 07:34 UTC.
Many experts find the present trend unusual from the previous cycles. In particular, the bull market years feature altcoins frequently outperforming Bitcoin. Such occurs as capital spills over from the largest crypto by market value into the small-cap assets.
The capital inflow into the small-cap assets played out during the first-quarter BTC rally, where the price of altcoins led by Solana (SOL) soared alongside meme coins WIF and PEPE.
In a recent X (formerly Twitter) post, financial analyst Wesley Kress called the shift challenging the long-held belief that network effect would guarantee Ethereum’s dominance. The analyst considers Ethereum’s activity horrible in this cycle as investors are skeptical of its future.
Several market analysts dismiss the pessimistic take, terming such conclusions grossly exaggerated. The analysts consider that Ethereum will prove its worth, especially as the newly approved Ether spot ETFs sink in.
ETH ETFs Unlikely to Replicate BTC Success
Influencer Crypto Kaleo revealed in a Thursday X post lamenting the presence of too much hype regarding the ETF potential on ETH price. He added that the ETH ETFs are presently engulfed in too much FUD. He points out that ETH ETFs have only been listed for twelve days. This period saw BTC plunge and later rebound following the respective ETF debut on January 10.
The approval and ultimate listing of ETH ETFs in the US is bullish news capable of triggering an ETH price rally. Notably, it facilitates institutions to purchase Ethereum where they were otherwise barred by regulation to do so.
FarsideUK chief investment executive Jonathan Bier notes that ETFs are unlikely to bring Ethereum the magnitude of success realized by Bitcoin. Instead, the executive considers the greatest success to be people-driven alongside the entities that shift existing holdings in Ethereum Trust into ETFs.
Bier warns that the Grayscale’s Ethereum unwind could emerge more severe than witnessed during the Bitcoin unwind. The former exposes investors to capital gains taxes when disposing of their Ethereum Trust shares.
The FarsideUK executive observes that Ethereum investors lack loyalty compared to Bitcoin investors. The former always pursues the latest things offered with the newest technology.
Scrutiny into Ethereum activity relative to Solana shows that the SOL has outperformed ETH on several vital metrics relating to network activity. Solana finally triumphed over Ethereum in late July regarding the total transaction fees.
Ethereum Price Tumbles 4.4%
A glance at market-related on-chain metrics illustrates that investor interest in ETH is declining relative to BTC. CryptoQuant shows that Bitcoin’s realized capitalization, a metric tracking fresh investor flows into the BTC, surged by $187 billion since the onset of 2024 compared to $127 billion to the ETH.
The research head at CryptoQuant, Julio Moreno, considers that BTC overperformed ETH in various network fundamental metrics. The executive notes a falling ETH/BTC price ratio coincidentally as the transactions executed within the Ethereum network declined, unlike in the Bitcoin network.
Meanwhile, CoinGecko data shows Ethereum is down 4.4% in the past 24 hours to exchange hands at $2,568.79, with its 24-hour range at $2,523.26 – $2,707.82.
ETH’s daily trading volume is estimated at $15.459 billion, representing a 101.8% increment to signal a recent rise in activity from a day ago. Further, CoinGecko data indicates the seven-day rally of 9.2% is insufficient to overcome the 23.6% slide in ETH price, now 47% below the all-time high of $4,878.26, realized on November 10, 2021.