Ethereum (ETH) Market Reels From Trump's New "Liberation Day" Tariffs

As global markets reel from Trump's new “Liberation Day” tariffs and a sudden liquidity crunch, the crypto market is undergoing one of its most severe drawdowns

As global markets reel from Trump’s new “Liberation Day” tariffs and a sudden liquidity crunch, the crypto market is undergoing one of its most severe drawdowns since 2020. While Bitcoin has managed to hold relatively better ground, Ethereum is facing sharper losses. This has raised questions about why ETH is bleeding more than BTC in this downturn.

According to a recent report by Capital Flows, the ETH market saw capital inflows of +15.5B/month at its peak but is now experiencing outflows of -$6B/month. In contrast, the BTC market’s inflows have slowed but are still positive at +6B/Month.

The BTC vs ETH Realised Cap chart shows that since late 2022, Etheruem’s realised cap grew by only +32%, form $183B to $244B. However, the realised cap of Bitcoin during the period surged by at least +117%, from $402B to $870B.

This means that BTC has attracted much more investor demand than Ethereum in this cycle.

According to the BTC vs ETH MVRV chart, the MVRV ratio of ETH has declined below 1.0, and the same ratio of BTC has stayed above 1.0. The MVRV ratio is the ratio between the market value of a crypto-asset and its realised value.

This chart indicates that average ETH holders are now at a loss, but BTC holders still have paper profits. Investors in loss are more likely to sell. This explains increasing selling pressure in the Ethereum market.

The report further adds that Bitcoin holders have had higher average profit than ETH holders for 812 consecutive days. This long-term underperformance adds to the weaker sentiment around ETH.

Since September 2022, the ETH/BTC pair has dropped at least 75%. At the start of this month, the Ethereum/Bitcoin pair was at 0.02207. Since then, the market has slipped by over 11.46%.

This also shows that Etherem is severely underperforming compared to Bitcoin.

According to the latest report from Capital Flows, ETH investors locked in $564M in realised losses, compared to $240M for BTC during the latest sell-off.

Notably, in the past bull markets, ETH would occasionally outperform BTC, This cycle =m that has not happened.

In conclusion, with investor sentiment weakening and capital flows drying up, Etheruem’s underperformance may continue unless strong bullish momentum returns.

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FAQs

While Ethereum is trusted for its stout fundamentals, Bitcoin continues to dominate with its widespread adoptions.

As per our Ethereum price prediction 2025, the ETH price could reach a maximum of $5,925.

As per our latest ETH price analysis, Ethereum could reach a maximum price of $123,678.

By 2050, a single Ethereum price could go as high as $255,282.