More than 19 months after ethereum's historic Merge upgrade, the data is clear: the network's native asset, Ether (eth), is no match for bitcoin (btc).
The eth/btc price ratio hit another three-year low on Thursday at 0.044, with Ether last experiencing less market dominance versus bitcoin in May 2021.
Why is eth still dumping against btc?
The trend has been unpleasant and confusing for ethereum bulls, many of whom assumed eth would become a more palatable investment than bitcoin following the September 2022 merger.
At that time, the update introduced a proof-of-stake consensus mechanism and reduced the eth inflation rate by 90%.
Combined with the transaction fee burning mechanic previously implemented by ethereum, this meant that eth was now an investment with an intrinsic return and a negative inflation rate – bullish properties that its big brother btc did not possess.
Despite these qualities, eth/btc has fallen by 45% since the merger took place. This is especially noteworthy given that cryptocurrencies have been in a general bull market for the past 18 months. At such times, altcoins are used to outperforming btc.
Joe McCann, the founder of the Asymmetric crypto fund, twitter.com/joemccann/status/1790844239410286695″ data-wpel-link=”external” target=”_blank”>tweeted on Wednesday that “flipping” – a dream that eth's market capitalization could one day surpass that of btc – “was always a dream that has turned into a nightmare.”
“bitcoin is 'ultrasound money' and Solana is the 'global supercomputer,' McCann argued. “ethereum is neither.”
CryptoQuant experts argued that Ether is no longer “ultra money” since its Dencun upgrade went into effect in March 2024. While it reduced transaction fees for users, it also turned Ether back into an inflationary currency, hurting its investment thesis as a better store of value. than bitcoin.
Meanwhile, recent technical advances have allowed developers to bring applications to bitcoin that were once exclusive to ethereum and other more programmable chains.
These include Ordinals nft, Runes trading, and BitVM, a new framework for bringing trust-minimized smart contracts and layer 2 networks to the bitcoin ecosystem.
After just over a year since Ordinals gained traction, bitcoin has already become a more popular chain for nft trading than ethereum. CryptoSlam data shows.
ethereum's regulatory problems
Aside from technical concerns, ethereum also faces significant hurdles on the regulatory front.
While bitcoin spot ETF products were approved in January, experts believe that any imminent approval for an Ether spot ETF remains highly unlikely. Additionally, most altcoins, including Ether, appear to be on the radar of the US Securities and Exchange Commission, raising legal issues against exchanges and other companies that interact with such assets.
“We believe that as long as Gary Gensler chairs the SEC, any developments in the digital asset space will have to come through judicial channels,” said Mark Connors, head of research at 3IQ, in a twitter.com/3iq_corp/status/1790036693061439815″ data-wpel-link=”external” target=”_blank”>interview with MarketWatch.
Solana (SOL) is up a whopping 665% over the past year, compared to eth's 61% rise. Ether's total crypto market dominance has now dropped to 15.1%, compared to bitcoin's 54.5%, according to CoinMarketCap.
Binance Free $600 (CryptoPotato Exclusive) – Use this link to register a new account and receive an exclusive welcome offer of $600 on Binance (All the details).
LIMITED OFFER 2024 for CryptoPotato readers on Bybit: Use this link to register and open a $500 btc-USDT position on the Bybit Exchange for free!
<!– ai CONTENT END 1 –>
<script async src="//platform.twitter.com/widgets.js” charset=”utf-8″>
