đ„ Ethereum vs Bitcoin underperforms since the mergerđ
Since Ethereumâs merger, which was on September 15, 2022, when Ethereum switched from Proof of Work (PoW) to Proof of Stake (PoS), its performance seems to be less impressive than Bitcoin.
Meanwhile, friends who are keen to invest in Ethereum may be disappointed, because data shows that the value of Ethereum relative to Bitcoin has fallen by 44% since then!
Letâs take a look at the price of ETH/BTC, which is now below 0.0425, the latest low since April 2021. Although the United States approved Ethereumâs spot exchange-traded fund (ETF) more than a month ago, Ethereumâs growth momentum has not soared as quickly as Bitcoin, and the Ethereum ETF has basically been bleeding since its listing, with a total outflow of US$568 million.
Observing the on-chain data, investors seem to prefer Bitcoin. ETHâs spot trading volume used to be 1.6 times that of Bitcoin, but now it has dropped to 0.76 times. This may be related to the relatively weak activity on the Ethereum network, after all, the decline in transaction fees is also one of the factors.
Moreover, the supply of Ethereum is also increasing, mainly due to the reduced fee consumption rate after the Dencun upgrade. If this situation continues, the supply of Ethereum may return to the level before the merger within three months.
However, analysts believe that if the market value to actual value ratio of ETH/BTC drops to 0.45, then Ethereum will officially become an undervalued asset relative to Bitcoin.
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Ethereum's performance since the merger has not met expectations, partly due to the side effects of technical upgrades such as increased supply and lower transaction fees, which may have affected investor confidence.
Despite the current challenges, Ethereum's long-term potential in the smart contract and DeFi fields is still huge and is expected to provide strong support. However, investors should be aware of the complexity and volatility of the cryptocurrency market when making cryptocurrency investment decisions.
đŹ Let's talk: Do you think the future development of Ethereum is promising? What are your insights on the current cryptocurrency market? How do you manage risks when investing in Ethereum?Share your thoughts!
