Ether Pales in Comparison to the Rise of Bitcoin and Solana
- PHPzOriginal
- 2024-08-09 15:14:11866browse
Despite the recent launch of Spot Ether ETFs on July 23, the price of ETH has only declined. More than $329.8 million in volume has been traded on these
The second-largest cryptocurrency, ETH, has been losing ground to its competitors, BTC and SOL, in the latest market cycle. While BTC and SOL have posted significant gains, ETH has dropped by more than 28% since the launch of spot ETFs.
Ether Pales in Comparison to BTC, SOL Rise
After the much-anticipated launch of Spot Ether ETFs on July 23, the price of ETH has continued to decline. These new products had generated a total trading volume of about $329.8 million, with $7.06 billion in net assets as of August 7. However, this was not enough to prop up the price of the second-largest crypto.
In comparison, Bitcoin gained more than 21% since its own Spot ETFs started trading on January 10. As of August 7, the Bitcoin ETFs were generating a total trading volume of about $2.2 billion.
Over the year 2024, the gap widened further, with Solana and Bitcoin gaining respectively 41% and 25% against Ether. This means that the price of ETH dropped significantly more than BTC and SOL since the beginning of the year.
Factors Impacting Ether’s Performance
Several elements seem to explain this underperformance of Ether. Some point to the fragmentation of Ethereum’s layer 2 protocols, which would impact its overall liquidity.
Others highlight the rise of Solana, fueled by the memecoins frenzy on its network. According to DeFiLlama data, Solana surpassed Ethereum in monthly DeFi transaction volume in July, with $55.876 billion compared to $53.868 billion for Ethereum.
Moreover, the crypto trading giant Jump Trading has massively sold its Ether positions in recent weeks, sparking concern in the market. The company is also under investigation by the CFTC in the United States.
Given the decline of Ether compared to its major competitors, investors will be closely watching the upcoming developments of the second-largest crypto. To regain market confidence and recover lost ground against its increasingly threatening challengers, Ethereum will need to overcome several challenges.
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