Bitcoin Crushes the Hopes of Ether Mercilessly

BTC/ETH ratio has just hit its lowest level in five years, at 0.02193. A staggering drop of 39% in one year.

The price ratio between Bitcoin (BTC) and Ether (ETH) has hit its lowest level in five years, as the apex cryptocurrency continues to crush the hopes of its rival mercilessly.

The ETH/BTC ratio has just touched 0.02193, marking a staggering drop of 39% in one year. For the first time since a halving, Ether seems to be buckling under the weight of its older sibling. But what’s behind this historical inversion?

Between being a refuge amidst macroeconomic turmoil and a repositioning of investors, Bitcoin is consolidating its status as a safe haven. A deep dive into the mechanics of an unequal duel.

Halving and macro market: the explosive cocktail for Bitcoin and ETH?

As we discussed in our previous article, traditionally, Ether outperformed Bitcoin in the twelve months following this event. But this time, the scenario is unfolding differently.

The cause? A tense economic climate. Trade war, persistent inflation, high bond yields… Investors are fleeing risk. The result? We’re seeing record highs for gold, and Bitcoin, seen as “digital gold,” is absorbing the capital.

In this context, Ethereum is paying for its status as a technological bet. While Bitcoin embodies stability with its large market cap and growing institutional presence, ETH remains tied to often-delayed promises of DeFi and smart contracts.

And in 2024, patience is wearing a bit thin. Glassnode’s data confirms this: the ETH/BTC ratio has decreased by over 50% since the halving, a situation not seen since 2019. A strong signal: during the storm, assets perceived as risky are sacrificed.

To put this into perspective, in the third quarter of 2019, the ratio plunged to 0.0164, marking a quarterly decrease of 46%.

Today, history is repeating itself, albeit in a very different context. The crypto market has matured, and institutions are present. Their appetite is clearly leaning towards Bitcoin, whose market cap reassures.

ETH losing momentum against altcoins: a structural problem?

But Ether’s decline isn’t limited to its face-off with Bitcoin. Even against other altcoins, the second cryptocurrency shows signs of fatigue.

Proof of this: the SOL/ETH (Solana/Ether) ratio has increased by 24% since January, despite a difficult year for SOL. Translation? Investors prefer to bet on ecosystems perceived as more innovative, even if volatile.

On the other hand, Ether seems to be caught between its status as a pioneer and aggressive competition.

This poor performance raises questions about its future role. While Bitcoin positions itself as a safe haven with seamless integration into the traditional financial system through products like BTC futures and the iShares Bitcoin Trust ETF, and its price action is showing signs of a potential bullish divergence on lower time frames, which could indicate an upcoming trend reversal,

Ether is struggling to embody a clear niche. Network updates (like Ethereum 2.0) are slow to convince, and high transaction fees are pushing developers towards alternatives. As a result, its technological leadership is no longer a given.

Finally, this dynamic reveals a shift in mentality among investors. In the face of uncertainty, diversification is no longer enough. They are now prioritizing high liquidity and assets with managed risk.

Bitcoin, with its liquid market and growing institutional adoption (ETFs, regulations), meets these criteria. It also stands as the most traded cryptocurrency on major exchange platforms like Binance, further increasing its liquidity.

On the other hand, Ether, being more speculative despite its strong community and development activity in the DeFi space, becomes a secondary choice.

The gap between Bitcoin and Ether is not just a question of price. It symbolizes a growing divide between security and innovation, between maturity and experimentation.

In 2024, the market has chosen: against headwinds, Bitcoin imposes itself as the ultimate bulwark.

Ether, for its part, will have to redefine its value to reclaim its place. One certainty? In this game of crypto chess, King Bitcoin firmly retains its crown. As Raoul Pal points out, the wait is almost over for a BTC rally.

Maximize your Cointribune experience with our "Read to Earn" program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.

Fascinated by Bitcoin since 2017, Evariste has continuously researched the subject. While his initial interest was in trading, he now actively seeks to understand all advances centered on cryptocurrencies. As an editor, he strives to consistently deliver high-quality work that reflects the state of the sector as a whole.