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Ether's Worst Showing Versus Bitcoin Highlights Cycle of Diminishing Returns: Van Straten
The two tokens' relative performance is more a sign of bitcoin strength than ether's weakness, one observer said.
Updated Jan 30, 2025, 11:52 a.m. Published Jan 30, 2025, 9:54 a.m.
What to know:
- Ether's underperformance relative to bitcoin is it's worst during a bull market.
- ETH is providing diminishing returns for each cycle from the tokens' respective lows.
- The ether-to-bitcoin ratio dipped below 0.03 on Wednesday, the lowest level in four years.
Ether (ETH), the second-largest cryptocurrency, has fallen out of favor relative to bitcoin (BTC), returning the worst bull-cycle performance against its larger rival since the Ethereum blockchain's inception in 2015.
A comparison of the ether to bitcoin ratio across past cycles from the tokens' respective lows shows consistent underperformance. The black line in the chart above represents the current cycle that started in November 2022, when bitcoin bottomed at around $15,500 during the collapse of crypto exchange FTX. With each cycle, ether's return against bitcoin has diminished.
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On Wednesday, the ratio dropped below 0.0300 to touch 0.02993, a four-year low. The previous low was recorded on Jan. 19, a day before President Trump's inauguration. This month, the ratio — the exchange rate between the two largest cryptocurrencies — is down 15%. It has declined 44% over the past year.
Bitcoin is currently trading around $105,000, having recovered from the slump to $98,000 caused by the release of DeepSeek, a Chinese artificial intelligence (AI) program. Ether, currently at $3,202, would need to reach roughly $3,360 to undo the DeepSeek damage.
"My general take is that the ether to bitcoin ratio underperformance is more due to a strength of bitcoin rather than a weakness of ether," said Andre Dragosch, head of research at Bitwise's European desk. "Ether tends to suffer from 'middle child syndrome,' it is not as scalable as smart contract competitors like solana (SOL) while it is not really competing with bitcoin as the prime store-of-value."
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Crypto Markets Today: Bitcoin Slips Back Toward Danger Zone Ahead of Fed Decision
Bitcoin surrendered gains from earlier in the week, fell back toward $90,000 as traders braced for Wednesday’s Federal Reserve rate decision.
What to know:
- A 25 basis-point interest-rate cut has been priced in for weeks, and risk assets could drop on the news if no fresh catalysts emerge.
- Tokens like HYPE, STRK, QNT and KAS fell 6%–9% in 24 hours
- CoinMarketCap’s altcoin-season index sits at a cycle low of 18/100.
- Bitcoin is down 20% over 90 days and more than half of the top-100 tokens have fallen at least 40%. FET and TIA are among the worst performers while ZEC, DASH, BNB and BCH stand out as rare stabilizers.
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