Ethereum's recent performance has raised eyebrows. Despite its Wall Street debut, ETH has struggled to keep pace with competitors.
The crypto market took a nosedive on Sunday. ETH-to-BTC conversion ratio hit a yearly low of 0.041. Digital assets have since rebounded. Yet, the ratio remains at 0.043.
This trend bucks expectations. Typically, altcoins outperform Bitcoin in bull markets. Capital often flows from Bitcoin to riskier assets. This held true for Solana and meme coins like PEPE and WIF. Ethereum, however, didn't follow suit.
Financial analyst Wesley Kress tweeted his concerns. "Ethereum is trading horribly this cycle," he wrote. "People are realizing it's not the future."
Not everyone shares this pessimism. Some analysts believe time will favor Ethereum. They argue the new Ethereum spot ETFs need time to take effect.
Crypto influencer Crypto Kaleo offered perspective. He noted Ethereum ETFs have been live for just twelve days. This mirrors Bitcoin's post-ETF timeline before its rebound in January.
ETFs should theoretically boost ETH's price. They allow institutions previously barred by regulations to invest in Ethereum. But the reality might be more complex.
Jonathan Bier, FarsideUK CIO, shared insights with Decrypt. "Much of the success will be driven by people and entities shifting their existing [Ethereum Trust] holdings into ETFs," he said. Bier pointed out that Grayscale's Ethereum unwind could be more severe than its Bitcoin counterpart. Investors face capital gains taxes when selling Ethereum Trust shares. "At the same time Ethereum investors are always looking for the latest thing with the newest tech," Bier added. "They're less loyal than Bitcoin investors."
Solana has been nipping at Ethereum's heels. It overtook Ethereum in total transaction fees in late July. This marked a first for the upstart blockchain.
On-chain metrics paint a mixed picture for ETH. CryptoQuant data shows Bitcoin's "realized capitalization" rose by $187 billion this year. Ethereum's increased by $127 billion. Julio Moreno, CryptoQuant's Head of Research, told Decrypt, "Bitcoin has overperformed Ethereum in certain network fundamental metrics." He noted a decline in the ratio of Ethereum to Bitcoin transactions, mirroring the ETH/BTC price ratio drop.
The crypto world is a rollercoaster. Ethereum's current slump might be temporary. But it's clear the blockchain giant faces stiff competition. Investors are watching closely. The next few months could be make-or-break for Ethereum's market position.