Ethereum Continues Losing Ground To Bitcoin With ETH/BTC Ratio at Multi-Yr Lows

Ethereum (ETH) continues to perform poorly against Bitcoin (BTC) because the second-largest digital asset by reported market cap hit latest multi-year lows against the highest cryptocurrency.

Ethereum Continues To Underperform Against Bitcoin

Today, Ethereum’s native ETH token slid further against BTC, recording a low of 0.0365 and erasing all its gains against Bitcoin since April 2021. This multi-year low against BTC is sure to dampen the expectations of ETH permabulls.

Source: ETHBTC on TradingView.com

In December 2021, ETH reached a neighborhood high of 0.0865 against BTC. Nevertheless, since then, the smart contract token has been on a continuous downward trajectory, declining by almost 58% against the premier digital asset.

Notably, the last monthly green candle that ETH posted against BTC was in May 2024. It is very likely that by the tip of October, ETH may have posted five consecutive monthly red candles against Bitcoin.

On a year-to-date (YTD) basis, ETH is down by over 30% against BTC. Interestingly, throughout the last three months, the ETH/BTC trading pair has declined by over 22%, indicating that major losses against BTC are more moderen.

While various aspects may very well be blamed for ETH’s lackluster price performance, a significant reason is the rapidly increasing competition from rival smart contract blockchains similar to Solana (SOL).

The chart below shows that SOL has been on an upward trajectory against ETH after a temporary consolidation in June 2024. On a YTD basis, SOL has recorded almost 60% gains against ETH. On the time of writing, the SOL/ETH ratio is trading near a latest all-time high (ATH) at 0.069.

What Is Holding ETH Back?

Although Ethereum adoption continues to grow – boosted by the recent Ethereum exchange-traded fund (ETF) approval by the US Securities and Exchange Commission (SEC) – the consequences aren’t entirely reflected in the value motion of the native ETH token.

A recent report found that greater than 34 million ETH – near 30% of its supply – is currently staked. Despite the lower circulating supply because of this of staking, ETH’s price continues to perform poorly against other digital assets.

As well as, the extraordinary growth witnessed by Ethereum layer-2 (L2) solutions similar to Optimism, Arbitrum, and Base, has taken the eye away from the smart contract platform. In August, Justin Bons, founding father of Cyber Capital said “Ethereum is dying while L2’s dance on its grave.”

Despite the growing pessimism toward its price motion, ETH whales remain unfazed as they proceed to scoop more tokens to learn from potential future price appreciation. Recent evaluation found that Ethereum whales now control about 43% of ETH’s entire supply.

Similarly, earlier this month, asset manager BlackRock was found to be selling its BTC holdings for ETH, suggesting the firm’s bullish outlook on the token. At press time, ETH trades at $2,532, up 0.2% prior to now 24 hours.