- The ETH/BTC ratio plunged to new lows on Tuesday after Bitcoin reached a new all-time high.
- Bitcoin and Solana have beaten Ethereum in terms of institutional capital inflows and meme coin volume, the two main drivers of the current bull market.
- Ethereum needs a stronger narrative, global brand strength and increased on-chain activity to catch up with Bitcoin.
Bitcoin (BTC) has outperformed Ethereum (ETH) in the past two years, setting new highs while the top altcoin struggles to catch up with speed. Several experts exclusively revealed to FXStreet that Ethereum needs global recognition, a stronger narrative and increased on-chain activity for the tide to shift in its favor.
Why Bitcoin has outperformed Ethereum
Bitcoin (BTC) reached a new all-time high on Tuesday, smashing its previous record of $93,477 as Ethereum (ETH) lagged following a 1% decline. The recent price action summarizes how Ethereum has performed relative to Bitcoin in the past two years. This is visible in the ETH/BTC ratio downtrend in the past 24 hours, reaching lows last seen in March 2021.
ETH/BTC weekly chart
While many thought ETH had broken out of the downtrend after seeing a surge in early November, it flipped downwards again last week.
The decline dates back to September 2022, before the FTX crash, which sent ripple effects across the crypto market. Since the event, Bitcoin has risen over 470% while Ethereum manages just 170%.
Along the way, Bitcoin has flipped previous records and set new all-time highs above the $90,000 threshold from a low of $16,500 in November 2022. On the other hand, Ethereum trades near $3,100, 36% below its all-time of $4,878, established in November 2021.
A notable cause for Bitcoin's incredible growth over ETH is the huge institutional inflows it has seen following the launch of Bitcoin ETFs in January. Most crypto community members tipped Ethereum to see a similar action after ETH ETFs launched on July 23. However, the ratio deepened after ETH ETFs launched in July.
Philipp Zentner, CEO and co-founder of LI.FI protocol exclusively mentioned to FXStreet that the underperformance could be due to the narratives surrounding both assets.
"BTC is a digital gold/store of value while ETH's value proposition is more complex. It revolves around actual utility and usability, and there are a lot more L1s with similar value propositions, making it difficult to compare them 1:1," said Zentner.
He also noted how, unlike previous cycles where ETH benefited from the Main chain hosting most of the general crypto market activity, faster transaction times and low fees in Layer 2 networks have altered market dynamics.
Meanwhile, Solana has recently proven to be a strong competitor for Ethereum, dominating on-chain trading volumes in the past weeks. This has also largely affected how ETH fairs relative to Bitcoin.
Ethereum has largely been losing the battle when compared on the basis of the two major drivers of the current bull cycle — institutional capital and meme coin activity.
Solana has hosted most of the meme coin activity in the current cycle due to its better user experience over Ethereum in terms of transaction speed and low fees.
"Bitcoin, on the other hand, has much stronger brand recognition and, much like some other assets traded because of their associations, is not attached to fundamentals," James Davies, CEO of Crypto Valley Exchange, stated in an exclusive quote to FXStreet.
"Bitcoin transactions don't scale to meet aspirations, in the same manner that gold is not convenient at a higher level. However, its value is now detached from fundamentals," he added.
Eneko Knörr, CEO and co-founder of Stabolut, echoed a similar sentiment, highlighting how Bitcoin's brand influence has scaled in the traditional financial landscape.
"High-profile endorsements [...] from President-elect Donald Trump and other politicians pledging to create Bitcoin reserves, along with bullish predictions from CEOs of major financial institutions like BlackRock and VanEck, have bolstered its appeal," said Knörr.
"While Bitcoin has successfully broken out of the niche crypto community to become a globally recognized and trusted asset among investors, Ethereum still lags behind in terms of brand strength and recognition as a reliable and popular investment," he added.
According to Zentner, Davies and Knörr, Ethereum needs to overcome key challenges for the tide to shift in its favor. These include global recognition, stronger narrative, increased activity and higher accessibility like Bitcoin.
Cryptocurrency prices FAQs
Token launches influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.
A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.
Macroeconomic events like the US Federal Reserve’s decision on interest rates influence crypto assets mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.
Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Crypto fraud soars as high-risk addresses on Ethereum, TRON networks receive $278 billion
The cryptocurrency industry is growing across multiple facets, including tokenized real-world assets, futures and spot ETFs, stablecoins, Artificial Intelligence (AI), and its convergence with blockchain technology, as well as the dynamic decentralized finance (DeFi) sector.
Bitcoin eyes $100,000 amid Arizona Reserve plans, corporate demand, ETF inflows
Bitcoin price is stabilizing around $95,000 at the time of writing on Tuesday, and a breakout suggests a rally toward $100,000. The institutional and corporate demand supports a bullish thesis, as US spot ETFs recorded an inflow of $591.29 million on Monday, continuing the trend since April 17.
Meme coins to watch as Bitcoin price steadies
Bitcoin price hovers around $95,000, supported by continued spot BTC ETFs’ inflows. Trump Official is a key meme coin to watch ahead of a stakeholder dinner to be attended by President Donald Trump. Dogwifhat price is up 47% in April and looks set to post its first positive monthly returns this year.
Cardano Lace Wallet integrates Bitcoin, boosting cross-chain capabilities
Cardano co-founder Charles Hoskinson announced Monday that Bitcoin is integrated into the Lace Wallet, expanding Cardano’s ecosystem and cross-chain capabilities. This integration enables users to manage BTC alongside Cardano assets, providing support for multichain functionality.
Bitcoin Weekly Forecast: BTC consolidates after posting over 10% weekly surge
Bitcoin (BTC) price is consolidating around $94,000 at the time of writing on Friday, holding onto the recent 10% increase seen earlier this week.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.