Key Insights
- Bitcoin has been steadily outperforming Ethereum for months, in terms of price and institutional interest.
- The ETH/BTC ratio has also crashed to new lows across the market.
- The speculation about the strategic Bitcoin reserve might have waned. However, Ethereum remains unable to beat Bitcoin.
- Unless Ethereum can change the tide with a new bullish move, Bitcoin’s dominance is expected to continue.
Ethereum has been steadily losing ground compared to Bitcoin, especially with the ETH/BTC trading pair dropping to a fresh new low of 0.031 as of today—its lowest in four years.
This decline shows the growing dominance of Bitcoin In the crypto market, especially with Ethereum struggling to keep up.
Here’s what’s been happening between these two.
Bitcoin’s Rise vs. Ethereum’s Modest Gains
The last year has seen Bitcoin soar by 158%, after climbing from a low of $41,000 at the start of last year, to an impressive $107,608 at the time of writing.
This performance has solidified Bitcoin’s position as the largest and better performing asset, after reaching consistent new all time highs through out the year.
On the flip side, Ethereum has only managed to post a 35% price increase during the same period.
Not only this, the cryptocurrency is also about 32% lower than its $4,878 all time high from November 2021—despite the bull run being in full-gear.
This stark difference between the two has also been mirrored by the ETH/BTC ratio, which has erased all the gains it made over the last four years.
The ETH/BTC Ratio
The ETH/BTC ratio is often used as an indicator that shows the relative strength between Ethereum and Bitcoin.
This ratio peaked at 0.087 in the fact altcoin season, as Ethereum led the market and targeted the $5,000 mark.
However, with the start of the new bear market, this ratio has declined after falling below the critical 0.054 support (a level that had previously held firm in June during the last bull run).
The ongoing decline has also sparked concerns about Ethereum’s ability to spearhead another altcoin season, especially as the market’s preference for Bitcoin remains unchallenged.
Speculation on a Strategic Bitcoin Reserve
Before 20 January, there were widespread rumors that President Donald Trump might announce a strategic Bitcoin reserve during his inaugural address.
However, his speech on Monday this week made no mention of Bitcoin or even crypto in general.
This dampened most of the bullish sentiment held by investors.
Additionally, the GOP congressional priorities report also showed no mention of Bitcoin or even crypto-related initiatives.
This further caused market confusion, with the probability of Donald Trump establishing a national Bitcoin reserve within his first 100 days in office dropping from around 50% to 38% on PolyMarket.
Can Ethereum Turn the Tide in 2025?
Despite its struggles, there might still be some hope for the cryptocurrency.
Analysts believe that a surge is coming for Ethereum, with many forecasting prices as high as $8,000.
The renewed interest in the spot Bitcoin ETFs could also lead to more capital inflows that improve its market standing.
However, to accomplish all of this, the cryptocurrency must first break above the psychological $4,000 zone to regain investor confidence.
Unless Ethereum can address its ongoing challenges and show investors a compelling narrative, the current outperformance of Bitcoin compared to Ethereum is likely to continue.
Whether this year will mark a new turning point for Ethereum remains to be seen. However, Bitcoin continues to dominate the market in the meantime.
