Ethereum has significantly lost ground against Bitcoin, with the ETH/BTC ratio dropping 70% post-Merge. We explore the main reasons and future prospects.
Why Is Ethereum Losing Market Share to Bitcoin?
Ethereum's on-chain activity has decreased, stalling deflationary supply growth. Low gas fees limit ETH burning via EIP-1559. Concurrently, Bitcoin-based ETFs have attracted billions, enhancing BTC's dominance. The popularity of Solana and other Layer 1 blockchains further influences Ethereum.
Will Ethereum Rebound or Continue Its Downtrend?
Positives for Ethereum include the launch of ETFs and the anticipated Dencun upgrade, which may increase demand. Additionally, rebounds in DeFi and NFT markets could boost network activity and gas fees. Risks include continued Bitcoin dominance and Ethereum's struggle to differentiate from new competitors.
Conclusion
Ethereum's 70% decline against Bitcoin highlights its current issues and challenges for long-term positioning. ETH needs strong catalysts to regain momentum and investor confidence.
A short-term ETH/BTC rebound is possible, but Ethereum must boost network activity and investor confidence to overcome its long-term downtrend.
