Ethereum Trading At 40-Month Lows Versus Bitcoin: Is This An Endorsement Of BTC?

As a seasoned researcher with years of experience in the cryptocurrency market, I find myself constantly intrigued by the ebb and flow of digital assets. The current state of Ethereum versus Bitcoin is one such puzzle that keeps me engaged.


Ethereum maintains its stability in terms of writing, but it’s lagging behind Bitcoin in performance. Despite Ethereum being above $2,400 and potentially surpassing $3,000 in future years, the significant growth of the world’s top-valued coin could drive the ETH/BTC ratio to record lows over the next few months.

ETH Struggling Versus Bitcoin, ETH/BTC Ratio Drops To A 40-Month Low

According to IntoTheBlock’s data from September 20, the price of Ethereum relative to Bitcoin has not been this low for more than 40 months. This suggests a strong bullish sentiment towards Bitcoin in the market, despite institutional involvement.

Surprisingly, even after the approval of Ethereum Spot ETFs for trading in July 2024, ETH‘s performance has been lackluster. This authorization of these intricate derivatives enables institutions to invest in the second most valuable crypto within legal boundaries without incurring significant costs as before.

Ethereum Trading At 40-Month Lows Versus Bitcoin: Is This An Endorsement Of BTC?

Previously in the U.S., institutions looking to acquire Ether (ETH) had to buy shares of Grayscale’s Ethereum Trust (ETHE). The drawback was that transaction fees were higher due to uncertainty about ETH’s regulatory status. However, the approval of spot Ethereum ETFs, which prohibits issuers from staking coins bought by clients, is considered a positive development, even though it doesn’t directly affect the current situation.

As of now, the U.S. Securities and Exchange Commission (SEC) hasn’t officially declared Ether (ETH) as a commodity like Bitcoin, but consistently, the Commodity Futures Trading Commission (CFTC) has classified ETH as a commodity.

Based on the contrast between Ethereum and Bitcoin’s performance, analysts at IntoTheBlock believe that institutional investors hold a strong faith in Bitcoin’s future potential. They particularly noted Bitcoin’s comparative stability as opposed to Ethereum, an asset with a more volatile risk-reward ratio.

Will Ethereum Find Support?

Even with this assessment, it should be noted that Bitcoin remains a transactional layer, riding on its first-mover advantage. On the other hand, Ethereum is the first smart contracts platform, and hosts various innovations ranging from DeFi, NFTs, and is now driving tokenization.

Previously, Larry Fink, the head of BlackRock, predicted that the value of Real-World Asset (RWA) tokens, primarily created on Ethereum, could reach a market cap of one trillion dollars. Notably, BlackRock has introduced BUIDL, a product that tokenizes U.S. Treasuries, onto the Ethereum platform.

Ethereum Trading At 40-Month Lows Versus Bitcoin: Is This An Endorsement Of BTC?

As a crypto investor, I’m keeping a close eye on the ETH vs BTC dynamics. Upon scrutiny of the daily chart, it seems that the trend is showing signs of a possible short-term reversal. The bullish double-bar formation, which was established on September 18 and 19, has been validated today, hinting at potential growth in the near future.

Ethereum Trading At 40-Month Lows Versus Bitcoin: Is This An Endorsement Of BTC?

Concurrently, Ethereum appears to be gaining strength, moving past the 61.8% Fibonacci retracement point within the 2020-2021 trading range, hinting at a potential positive shift.

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2024-09-21 08:41