The value of Ethereum (ETH) continues to decline in comparison to Bitcoin (BTC) as Bitcoin’s dominance increases, especially with the imminent inauguration of US President-elect Donald Trump today. Currently, the ETH/BTC trading pair is at 0.031, a record low for the ratio in the last four years.
ETH/BTC Ratio Plummets Amid Bitcoin Surge
Bitcoin has seen a remarkable 158% increase over the past year, soaring from around $41,000 in January 2024 to $107,608 recently. This surge has led to multiple all-time highs (ATH) throughout the year. In contrast, Ethereum has experienced a modest 35% return during the same period and remains 32% below its ATH of $4,878 from November 2021.
According to the weekly chart from TradingView, the ETH/BTC ratio has hit a fresh low not seen in four years, fueling concerns about a possible altcoin season led by Ethereum.
Currently standing at 0.031, the ETH/BTC ratio has wiped out all gains made since March 2021. The ratio peaked at 0.087 in December 2021 during the peak of the altcoin season that year. However, Ethereum, as the second-largest cryptocurrency by market cap, has continuously declined against Bitcoin since then.
In May 2024, the ratio dropped below the critical support level of 0.054 that had previously held in June 2022. Various factors, including Trump’s alleged preference for Bitcoin and competition from platforms like Solana (SOL), have contributed to Ethereum’s underperformance.
Unlike Bitcoin, Ethereum has faced challenges in terms of adoption. Many companies globally are integrating Bitcoin into their reserves, solidifying BTC’s position as a leading digital asset. Speculation about a potential US strategic Bitcoin reserve has further enhanced Bitcoin’s appeal and value.
In contrast, Ethereum’s high issuance rate has called into question its reputation as “ultrasound money.” The performance of Ethereum in 2024 has diminished the confidence of some major holders, as evident by a recent sale of 10,070 ETH at a loss of $1 million by a large ETH holder.
Will 2025 Change Ethereum’s Fate?
Despite the challenging price performance in 2024, cryptocurrency experts are hopeful for Ethereum in 2025. Reports suggest that Ethereum could see a surge to $8,000 this year.
Similarly, analyst Daan predicts that the ETH/BTC pair could surpass 0.04 in the first quarter of 2025. Institutional investors showed renewed interest in Ethereum exchange-traded funds (ETFs) in December 2024, hinting at significant capital inflow to the platform.
However, Ethereum must overcome strong resistance at the $4,000 price level. Currently trading at $3,368, ETH has seen a 1.3% decrease in the last 24 hours.
