Ethereum (ETH) Has Fallen Significantly Behind Bitcoin (BTC) as Its Market Cap Drops to Its Lowest Level Since Early 2021

The leading altcoin, on the other hand, had a market value of about $300 billion. This puts the ETH/BTC ratio at a low of just 0.037

Recent price action shows that Ethereum has fallen significantly behind as Bitcoin has gained the largest price advantage over the altcoin ecosystem in recent history.

Bitcoin is now about $1 trillion ahead of Ethereum, which has dropped to its lowest level since the beginning of 2021.

Data from Binance shows that Bitcoin was trading at around $68,000 on Monday, with a market value of $1.34 trillion.

The leading altcoin, on the other hand, had a market value of about $300 billion.

This puts the ETH/BTC ratio at a low of just 0.037, which was last seen in April 2021, after Ethereum had rallied by over 4,000% in the 12 months prior.

During the last bull market, Ethereum's price action was closely tied to that of other major altcoins, rising in value as Bitcoin did.

A key factor contributing to this ongoing performance disparity is the slower growth in institutional demand for Ethereum relative to Bitcoin.

The launch of spot Ethereum ETFs in July 2024 brought about mixed reactions and did not alter the broader summer trend.

According to Kaiko research, open interest in Bitcoin CME futures, which are used as a proxy for institutional interest, recently hit new all-time highs on multiple days.

Meanwhile, open interest in Ether futures on the CME is relatively low at 7,300 contracts ($970 million), indicating a less developed market and significantly lower institutional interest in Ethereum futures.

Despite the entire cryptocurrency market rallying in U.S. dollar terms after Ethereum's much-anticipated Merge update in September 2022, the leading smart contract platform has lost over half of its value relative to Bitcoin.

Over the past two years, several bullish catalysts in cryptocurrency have centered around Bitcoin.

Investors flocked to Bitcoin as a "digital gold" play amid several U.S. bank failures in March 2023. Later, the price of Bitcoin rallied for several months in anticipation of the approval of Bitcoin spot ETFs, a trend that continued in 2024 after the ETF's massive success.

In contrast to Bitcoin ETFs, which have absorbed nearly $20 billion in net flows since their launch, Ethereum spot ETFs have seen net negative flows as a result of losses in the Grayscale Ethereum Trust.

Despite the poor performance, online advocates for Ethereum continue to defend the second-largest cryptocurrency.

Anthony Sassal, an educator on Ethereum, argued that Ethereum's Layer 2 solutions are putting to rest the narrative that the network is expensive and slow, adding that current supporters are not simply "bandwagoners."

Traders are turning to digital assets with higher betas, partly due to ETH's underperformance after the merger and increasing competition from "ETH killers" like Solana.

Investors can also gain exposure to Ethereum through a range of Layer 2 solutions built on the network, which have outperformed the leading altcoin to a large extent.

Even though Bitcoin is the more popular cryptocurrency, ETH could benefit from the next US elections by reducing regulatory risks. Moreover, the Ethereum ecosystem is constantly evolving, which could affect its value proposition and adoption in the future

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