What to know:
- Ether’s underperformance compared to Bitcoin is its worst during a bull market.
- ETH is yielding diminishing returns for each cycle since the tokens’ respective lows.
- The Ether-to-Bitcoin ratio fell below 0.03 on Wednesday, the lowest level in four years.
Ether (ETH), the second-largest cryptocurrency, has seen a decline in its performance relative to Bitcoin (BTC), marking the worst bull-cycle performance against its larger counterpart since Ethereum’s launch in 2015.
A review of the ether to bitcoin ratio across past cycles reveals a consistent trend of underperformance. The graph in the article shows the ongoing cycle that began in November 2022, coinciding with Bitcoin’s fall to around $15,500 during the collapse of crypto exchange FTX. Over each cycle, Ether’s returns against Bitcoin have markedly decreased.
On Wednesday, the ratio slipped below 0.0300, reaching 0.02993, which represents a four-year low, with previously noted lows on January 19, a day before President Trump’s inauguration. This month, the Ether-Bitcoin ratio is down 15% and has seen a decline of 44% over the past year.
Bitcoin’s current trading price is approximately $105,000, rebounding from a dip to $98,000 linked to the introduction of DeepSeek, a Chinese artificial intelligence program. To counter the impact of DeepSeek, Ether, presently at $3,202, would need to rise to about $3,360.
“My general take is that the ether-to-bitcoin ratio underperformance reflects Bitcoin’s strength rather than Ether’s weakness,” stated Andre Dragosch, head of research at Bitwise’s European desk. “Ether suffers from ‘middle child syndrome’; it is neither as easily scalable as smart contract competitors like Solana (SOL) nor does it compete with Bitcoin as the prime store-of-value.”
