Ethereum Can’t Keep Up with Bitcoin or Solana: What’s Going On?

Even after Ethereum’s arrival on Wall Street, the ETH price has failed to keep pace with the prices of competing cryptocurrencies in this cycle.

According to TradingView, the ETH-BTC conversion rate hit a yearly low of 0.041 as crypto markets plunged on Sunday. Digital assets, including ETH, have made a solid recovery since then, but the ratio remains at 0.043 at the time of writing.

Many people can’t help but think this trend is strange. During bull markets, altcoins often outperform Bitcoin as capital flows from major digital assets to riskier smaller assets. In fact, this was proven true as altcoins like Solana and meme coins like PEPE and WIF rallied in Bitcoin’s first quarter. Just not ETH.

“These changes challenge the long-held belief that Ethereum’s dominance can be maintained by network effects alone.” wrote “Ethereum has been trading horribly this cycle, and I think people are realizing that it’s not the future,” financial analyst Wesley Kress tweeted Tuesday.

However, several other analysts believe that such pessimism is vastly overblown. They say time will be Ethereum’s best friend, especially as new Ethereum spot ETFs are given time to find their footing.

“There has been too much hype about the potential of this ETF. immediately “The value for money is so high that there is so much FUD.” said Crypto influencer Crypto Kaleo said on Thursday that the Ethereum ETF has been live for 12 days, which is exactly the same amount of time it took for BTC to bottom and bounce back after the ETF was launched in January.

In theory, the introduction of an ETF is expected to have a positive impact on the price of ETH, as it will allow various institutions to purchase Ethereum, which was previously difficult to purchase due to regulations.

But according to Jonathan Beer, CIO of FarsideUK, an ETF is unlikely to bring Ethereum the same level of success as Bitcoin.

“Most of the success will come from people and businesses converting their existing (Ethereum Trust) holdings into ETFs,” Bier said. DecodeHe said Grayscale’s Ethereum sale could be more serious than its Bitcoin sale, as investors would have to worry about capital gains taxes by selling Ethereum Trust shares.

“At the same time, Ethereum investors are less loyal than Bitcoin investors,” he added. “Ethereum investors are always looking for the latest products with the latest technology.”

Throughout the year, Solana has been outpacing Ethereum in key metrics related to network activity. At the end of July, Solana Surpass Ethereum’s total transaction fees have hit an all-time high for the first time ever.

Several market-related on-chain metrics also show investor interest in ETH fluctuating alongside BTC. According to CryptoQuant, Bitcoin’s “realized capital” (a measure of the flow of new investors into BTC) has increased by $187 billion so far this year, while ETH’s has increased by $127 billion.

“Bitcoin has outperformed Ethereum on certain fundamental network metrics,” said Julio Moreno, head of research at CryptoQuant. Decode. “For example, as the ETH/BTC price ratio fell, the ratio of the number of transactions on the Ethereum network to the number of transactions on the Bitcoin network also decreased.”

Edited by Ryan Ozawa.