Why Ethereum’s Price Isn’t Surging as Much as Before and Trails Behind Bitcoin: What Can We Expect in the Near Future?
Cryptocurrency experts have weighed in on the recent underperformance of Ethereum, which has caught the attention of investors.
The two largest cryptocurrencies, Bitcoin and Ethereum, are currently moving in opposite directions, causing confusion among investors. Ethereum (ETH) saw a 7% drop last week, reaching $2,525, while Bitcoin (BTC) remained relatively stable at $68,957, according to data from CoinGecko.
This divergence is significant because Bitcoin and Ethereum have historically moved in tandem. Ben Caselin, the chief marketing officer at crypto exchange VALR, explained that although Ethereum has outperformed Bitcoin in previous cycles, the current dynamic has shifted.
Apart from the impressive rally of Solana (SOL), which gained nearly 7% in the past week, Bitcoin’s resilience can be attributed to two key factors: flows into spot Bitcoin ETFs and the increasing popularity of memecoins. This rally in BTC and Solana has further accentuated the divergence trend that began after spot Ether ETFs went live in July.
Since the launch of spot Ethereum ETFs, the price of Ethereum has fallen by 36%, while Bitcoin has only gained a modest 2%.
Despite the anticipation surrounding the long-awaited Ethereum ETFs, these financial products have struggled to gain the same level of traction as their Bitcoin counterparts. SoSo Value’s data reveals that spot Ethereum ETFs have experienced net outflows of over $504 million since July. In contrast, spot Bitcoin ETFs, launched in January, have seen inflows of around $22 billion.
“Regulators and traditional investors are showing more openness to BTC, but not ETH, at least not yet,” commented Shauli Rejwan, Managing Partner at Masterkey.VC.
The recent decline in Ethereum’s price coincides with the rising popularity of other layer 1 protocols like Solana. Ben Caselin noted that there is no guarantee Ethereum will maintain its top spot in the long term, but he acknowledged that upcoming events like the US elections could create volatility, potentially benefiting the price of ETH in the short term. However, he warned that such events could also serve as an “exit liquidity” point for some investors.
However, Rejwan remains cautiously optimistic, stating that it is too early to dismiss Ethereum. He believes that Wall Street’s interest in spot Ethereum ETFs may take six to 10 months to materialize or even accelerate if a bull run begins.
*This article does not provide investment advice.
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