From September 18, after the Fed’s rate cut, the trend of Ethereum’s price is following that of Bitcoin.
The trend of the price of Bitcoin (BTC)
On September 18, the price of Bitcoin was about $60,000.
After the Fed’s rate cut of 50 basis points, which had already been partially priced in on the financial markets, the price rose to almost $64,000 the following day.
It was a level that had not yet recovered after losing it at the end of August.
A week later it started to rise again, reaching up to $66,000, but at the end of September there was a correction that brought it back to the pre-cut price of about $60,000.
This phase of apparent lateralization might have ended about ten days ago, when suddenly it returned to $63,000, and then continued the rise even above $64,000 starting from Monday of the past week.
Now it has been seven days that it remains steadily above $66,000, oscillating around $67,000.
The performance of Ethereum (ETH) price
On September 18, the price of Ethereum was about $2,300.
Just as it happened for BTC, the following day it rose to $2,400, and in the days that followed it first rose to $2,500 and then even to $2,600.
At the beginning of October, however, the day after Bitcoin, the correction began that brought it back to $2,300, exactly as happened to BTC.
Even in the case of Ethereum the awakening occurred on October 11, with first a return to $2,600, and then starting from Sunday the 20th also a return above $2,700.
The BTC/ETH ratio: the relationship between Bitcoin and Ethereum after the Fed’s cut
However, if the relationship between the market capitalization of Bitcoin and that of Ethereum is analyzed, it is noted that from September 18 to 23 it had slightly decreased, going from 4.2 to 3.9.
So, at first, Ethereum had slightly outperformed Bitcoin.
However, starting from the first of October, when there was the correction of ETH one day after that of BTC, the ratio quickly returned to the previous level of 4.2.
In fact, since then it has remained almost stable around this level, with brief and insignificant oscillations.
It should be noted, however, that in July it was at 3.2, and that the current level of about 4.2 times is close to the annual highs.
Therefore, the alignment of the price trend of ETH with that of BTC actually started only in October, because at the end of September the ratio between the capitalization of Bitcoin and Ethereum first fell and then rose, albeit slightly.
Not only Fed: the causes of Ethereum’s weakness compared to Bitcoin
The analysts at Kaiko Research have just published a report that analyzes the issue in search of the causes.
Why is $ETH lagging $BTC still and will it continue?
We looked into this topic as well as the popularity of meme tokens and why $WLFI wasn't a big hit in this week's Data Debrief. Check it out below 
https://t.co/WQV39oMuGZ
— Kaiko (@KaikoData) October 21, 2024
According to this report, the blame for the slower growth is the institutional demand for Ethereum compared to Bitcoin.
In fact, the introduction of spot ETFs on Ethereum in July received mixed reactions, and it failed to reverse the trend during the summer.
Perhaps too much was expected from these ETFs, especially after the sensational success of those on BTC in January, but Bitcoin generally appeals more to institutions than Ethereum.
Therefore, despite the theoretical conditions for a price reaction of ETH to the launch of new ETFs on the US exchanges, this reaction was very timid, if not even irrelevant.
The spot ETFs
Suffice it to say that until today, in almost three months, the spot ETFs on ETH have accumulated a total of more than 460 million dollars in outflows, whereas those on BTC began to record net inflows after just a few weeks.
The reason must always be sought in Grayscale’s ETF, which was indeed born in July but from the transformation of a previous fund into an ETF.
In fact, this ETF, called ETHE, has recorded outflows totaling more than 3 billion dollars in the last three months, and not all have been absorbed by the other new ETFs.
However, regarding GBTC, that is Grayscale’s ETF on Bitcoin, already in February its outflows began to be completely reabsorbed by the other ETFs.
All this has prevented Ethereum from detaching from Bitcoin despite the launch of ETFs on ETH.
Furthermore, Bitcoin is more favored than Ethereum in the American markets, perhaps precisely because it is more appealing to traditional investors.
Kaiko Research points out that the share of BTC traded during the hours when traditional U.S. financial markets are open reached a historic high between January and early October, while on the contrary, the share of ETH decreased.
