Ethereum (ETH) is facing many challenges amid the dynamic changes in the cryptocurrency market. As investors' attention gradually turns to Solana (SOL) and Bitcoin (BTC), Ethereum is struggling in the current cycle.
Compared to Bitcoin and Solana, Ethereum has attracted significantly less investor interest. From the year-to-date (YTD) data, Ethereum has only provided investors with an 8% return rate, while Bitcoin and Solana have both achieved double-digit returns. This gap has gradually shifted investors' attention away from Ethereum. Preferences of institutions and private capital
Institutional capital in the cryptocurrency space is mainly concentrated in Bitcoin, especially through ETFs. Since the launch of the Ethereum ETF in July, its net negative flow has reached $546 million, which fully demonstrates the lack of interest of institutional investors in Ethereum.
At the same time, private capital also has reservations about Ethereum. They believe that Ethereum is overvalued, and thus turn capital to other competitors that are considered undervalued, such as Solana, Celestia (TIA), and Sui (SUI).
The SOLETH ratio, which tracks the value of Solana relative to Ethereum, has exploded since last year. This data further confirms that investors may be shifting from Ethereum to Solana.
Despite facing many difficulties, Ethereum still has its own advantages. It is the only altcoin that has been approved for ETF in the United States, which provides a certain foundation for its future development.
Some analysts are optimistic about the future of Ethereum. Zaheer Ebtikar of crypto hedge fund Split Capital believes that Ethereum may regain investor interest, especially from institutional investors, starting in 2025. He proposed several factors that could prompt this shift, including a possible increase in demand from ETF buyers, possible changes within the Ethereum Foundation, and Trump's victory (although the factors affecting it are more complex and uncertain).
At press time, Ethereum is valued at $2,400, having been consolidating between $2,300 and $2,500 since the beginning of October. Ethereum’s future direction in the cryptocurrency market remains uncertain, and investors and market participants need to pay close attention to market dynamics and the combined impact of various factors.
