Ethereum (ETH) has been continuously weakening compared to Bitcoin over the past three years, which is clearly reflected in the ETH/BTC ratio - a measure of ETH's relative price performance against BTC. Recently, this ratio has dropped to a record low of 0.022.
Commenting on this prolonged decline, Alex Thorn, Head of Research at Galaxy Digital, notes:
"Ether has lost 74% of its value compared to Bitcoin since transitioning from Proof-of-Work (PoW) to Proof-of-Stake (PoS)".
In fact, this decline has prompted some Ethereum community members to call for a return to the PoW mechanism like Bitcoin, hoping to help ETH recover its value.
For his part, Quinn Thompson, founder of the macro hedge fund Lekker Fund, affirms that ETH is "not worth investing in". He cites the decline in network activity along with other factors to support his view:
"There is no doubt that ETH has completely lost its investment value. A network worth $225 billion is witnessing a decline in transaction activity, user growth, and fee revenue. There is absolutely no rational investment argument here."
Thompson acknowledges Ethereum's utility value but does not see it as an attractive investment channel. This perspective is also shared by Nic Carter, partner at Castle Island Ventures and co-founder of the Coinmetrics data platform.
In fact, Carter attributes blame to the Layer 2 solutions (L2), arguing that they have diminished ETH's value. He declares:
"The biggest culprit is the overly greedy ETH L2 platforms, draining value from Layer 1 (L1), coupled with the social consensus that mass token issuance is entirely acceptable. ETH has buried itself in an avalanche of tokens it created."
According to Thompson, the ETH/BTC ratio has decreased by double digits during the 2023-2024 price cycle and could potentially plummet further during a market downturn.
Recent inflows into ETF funds continue to reflect a clear divergence between the two top cryptoassets. The US spot Bitcoin ETFs have recorded over $1 billion in capital inflow for 10 consecutive days, except for the previous Friday when $93 million was withdrawn.
Meanwhile, spot Ethereum ETFs face the opposite trend, with continuous capital outflow since February 20, with only two days recording inflows. In March alone, the total withdrawn value has exceeded $400 million.
In summary, the negative sentiment on social media seems to reflect institutional investors' indifference towards this altcoin.
Despite weak capital flow, ETH's recovery opportunity has not been completely eliminated. On the Polymarket prediction platform, investors are targeting an ETH price of $4,000 in 2025, with the largest total bet reaching $710,000. The second-highest bet is aimed at $5,000.
Meanwhile, on the Deribit options trading platform, traders do not expect ETH to reach $4,000 before September, with only a 10% probability. At the time of writing, ETH is trading at $1,870, down 54% from its $4,000 peak in December 2024.
You can view ETH prices here.
Disclaimer: This article is for informational purposes only and is not investment advice. Investors should thoroughly research before making decisions. We are not responsible for your investment decisions.
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