Ethereum Price Lags Behind Bitcoin in 2024
Ether (ETH) is currently trading at a 40-month low against Bitcoin (BTC), significantly underperforming in 2024. While Bitcoin has surged approximately 36% this year, ETH has barely moved, up just 0.02% from its January 1 opening.
ETH Performance Against BTC in the Last 90 Days
Over the past 90 days, Ether has fallen 34%, whereas Bitcoin’s decline is only 15%. The ETH/BTC ratio has dropped around 22% within this period, hitting a multi-year low of 0.04057 on September 11. This indicates that investors are favoring Bitcoin over Ether, as shown by the lack of demand for ETH.
Impact of Bitcoin and Ethereum ETFs
The success of US spot Bitcoin ETFs, approved by the SEC on January 10, has not been mirrored by Ethereum ETFs. According to on-chain data provider Glassnode, these investment products have had a far greater impact on Bitcoin’s price than on Ether’s. Bitcoin ETFs account for 8% of the spot volume, compared to only 1% for Ethereum ETFs. This disparity suggests a much higher investor appetite for Bitcoin ETFs than for their Ethereum counterparts.
Rising Bitcoin Market Dominance
Bitcoin’s market dominance has been steadily increasing, reaching a 40-month high of 58% on August 5. This rise emphasizes Bitcoin’s strength over altcoins, including Ether. Bitcoin dominance measures BTC’s market capitalization relative to the entire crypto market, acting as a gauge for market sentiment. As Bitcoin dominance continues to climb, ETH’s value against BTC is expected to keep falling, indicating that investors are more bullish on Bitcoin and likely allocating less to Ether.
Ethereum On-chain Metrics
The number of active addresses on the Ethereum network provides insight into the blockchain’s effective use and demand for ETH. The current 30-day average of 430,250 daily active addresses is a 7.7% decrease from 90 days ago and far from the 686,350 seen in May 2021. This decline suggests reduced interaction with the Ethereum blockchain and fewer Ether transactions.
Decline in Ethereum DApp Usage
Ethereum’s DApps have also seen a decline. According to DAppRadar, Ethereum DApps’ active addresses have dropped by 19% over the past 30 days. In contrast, competing blockchains like Solana and Tron have seen significant increases in total unique active wallets (UAWs), with rises of 257% and 343%, respectively. For ETH to rise above the $2,400 mark, sustained network growth and increased DApp usage are essential.
Conclusion
Ethereum’s underperformance compared to Bitcoin in 2024 is driven by several factors: the success of Bitcoin ETFs over Ethereum ETFs, rising Bitcoin market dominance, and sluggish on-chain metrics for Ethereum. For ETH to regain its footing, it will need increased network activity and a boost in DApp usage.
