Why Isn’t ETH Pumping Even Though BTC Hit a New ATH?
Bitcoin recently shattered its all-time high climbing to $104K and reaffirming its dominance in the crypto market. However, Ethereum (ETH) has struggled to keep pace, leaving many investors puzzled. Here are some reasons why ETH isn’t pumping alongside Bitcoin:
1. High Entry Costs for Investors
At over $4,500 (hypothetical example), Ethereum remains expensive compared to many altcoins. Retail investors often look for lower-priced assets, perceiving them as having more potential for growth. This psychological bias pushes them toward alternatives, even if ETH offers solid fundamentals.
2. BTC Dominance Effect
When Bitcoin makes major moves, market attention typically shifts heavily toward BTC. This “Bitcoin-first” mentality often sidelines altcoins, including Ethereum, as liquidity concentrates in BTC during its rally phases
3. Staking and Locked ETH
A significant portion of Ethereum is staked in the Beacon Chain for Ethereum 2.0, with additional ETH locked in DeFi protocols. While this reduces circulating supply, it also means less ETH is actively traded, making it harder to attract speculative volume during Bitcoin-led market surges
4. Ethereum’s High Gas Fees
Ethereum’s transaction fees remain high, which can deter smaller investors. As the network remains congested, users may opt for alternatives like Solana or Polygon, which offer lower fees and faster transactions. This reduces demand for ETH in the short term.
5. Regulatory and Upgrade Concerns
Ethereum recently transitioned to Proof of Stake (PoS) with the Merge, but investors may still be hesitant due to potential regulatory scrutiny over staking. Additionally, upgrades like Danksharding may introduce uncertainty, causing traders to adopt a “wait-and-see” approach.
6. Shifting Focus to Layer-2 Solutions
The rise of Ethereum Layer-2 solutions, such as Arbitrum and Optimism, has decentralized activity away from the main Ethereum
Will ETH Catch Up? What’s Your Take?
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