The Ethereum (ETH) to Bitcoin (BTC) price ratio has fallen to its lowest level since March 2021, indicating Bitcoin’s growing dominance in the cryptocurrency market. Amid a record high of $97,700 for the first time, Bitcoin’s price has been on the rise as investors focus on Bitcoin as a store of value, especially after the re-election of crypto-friendly Trump, while Ethereum faces regulatory challenges and competition from Solana.
According to data from TradingView, the ETH to BTC ratio on Binance has fallen by 1.54% in the past 24 hours as of Thursday afternoon in Asia, currently standing at 0.032, or 3.2%. Since the start of 2024, this indicator has fallen by more than 40%.
Ethereum ETH to Bitcoin BTC price chart Source: TradingView
This decline is due to the significant rise in the value of Bitcoin, which has accelerated since last July, following the re-election of the pro-cryptocurrency Republican candidate Donald Trump.
Bitcoin hit record highs today, surpassing $97,700 for the first time. It is expected to hit $100,000 by the end of the year.
On the other hand, the overall market rally triggered by Trump’s victory has not led to a similar boost in Ethereum’s value. Ethereum is down 3.2% while Bitcoin is up more than 7% over the past week.
The Importance of Monitoring the Ethereum vs Bitcoin Price
It is important to keep track of the relationship between the price of Bitcoin and Ethereum when analyzing the cryptocurrency market, as this relationship reflects the power dynamics between the two largest cryptocurrencies in the market.
Bitcoin is often considered a store of value and is referred to as “digital gold,” while Ethereum is a major platform for developing decentralized applications and smart contracts.
When Bitcoin’s price rises at a faster rate than Ethereum, it may indicate that investors are focusing on safe-haven assets that preserve value, rather than betting on blockchain applications and innovations.
Keeping track of this ratio helps in understanding market trends and shifts between value investments and technology applications.
Overall, Ethereum’s underperformance reflects a broader trend toward Bitcoin centralization, which could prevent investors from flowing into other altcoins, thus negatively impacting their prices.
Challenges Facing Ethereum vs Bitcoin and Solana
Ethereum price ETH is facing challenges in its value due to competition on two fronts: as a store of value against Bitcoin and as a smart contract platform against Solana.
Analysts believe that the adoption of spot Bitcoin ETFs in the United States has supported Bitcoin’s rise throughout 2024. It has attracted significant institutional and individual interest, further cementing Bitcoin’s status as a digital gold store of value.
While Ethereum has struggled to maintain momentum since the 2022 “merge” event, the Ethereum network’s official transition from Proof of Work (PoW) to Proof of Stake (PoS) , it faces regulatory uncertainty over its potential classification as a “security” in the United States.
On the other hand, the price of Solana has seen a strong rise this year, as it is the network behind the recent meme coin wave.
Data from The Block indicates that more than 94% of the new coins that appeared on decentralized platforms on Monday were launched on the Solana network.
Solana also surpassed Ethereum in some key indicators such as protocol fees and decentralized exchange volumes.
However, the Ethereum blockchain network is still the most economically active platform for smart contracts, attracting developers to build new applications that may help the network regain its momentum.
If Bitcoin’s rally loses momentum or market sentiment improves towards Ethereum, perhaps due to technical updates or renewed interest in its use cases, there is a possibility that the ratio could bounce back.
Peter Chung, head of research at Presto Research, believes that Ethereum’s poor performance so far does not necessarily mean it will continue in the coming years.
“With the Trump administration taking over a more supportive environment for cryptocurrencies, more Web 3 projects are likely to launch on multiple chains,” he added.
“It is still early days in the blockchain industry, so it is too early to rule out any chain over another, especially given the track record that the Ethereum community has shown and the intellectual capabilities that exist within it,” he concluded.