ETH/BTC Ratio Drops, but Analysts Predict Reversal
Ethereum has entered one of its deepest undervaluation zones in years, according to crypto asset manager Bitwise. Despite Ethereum’s underperformance against Bitcoin since 2022, historical trends suggest a potential February rebound.
Why Ethereum Is Lagging Behind
Key Highlights:
- ETH/BTC ratio has dropped 47% in the past year, with 1 ETH now worth 0.027 BTC.
- Layer 2 solutions have fragmented network activity, reducing direct value accrual for Ethereum’s base layer.
- The rise of AI tokens, memecoins, and tokenized real-world assets has diverted capital away from Ethereum.
Market Data and Institutional Investments
Key Highlights:
- Bitcoin ETFs hold $115 billion in total net assets, representing 5.9% of BTC’s market cap.
- In contrast, Ethereum ETFs hold just $10.15 billion, accounting for only 3.1% of ETH’s market cap.
Outlook: Ethereum’s Potential for a Rebound
Despite the bearish ETH/BTC trend, Bitwise analysts argue that Ethereum’s strong fundamentals could drive a price recovery. Over the past eight years, ETH has historically posted positive February returns in seven instances.
While Bitcoin recently hit an all-time high of $109,000, Ethereum remains 46% below its peak of $4,891. If ETH regains market confidence, analysts predict a significant price surge in the coming months.
Read the full article on
decrypt.
