Ethereum’s Price Struggles Compared to Bitcoin in 2024
Ethereum’s Decline Against Bitcoin
In 2024, Ethereum (ETH) has significantly underperformed compared to Bitcoin (BTC). As of the latest data, ETH is trading at a 40-month low against BTC. While Bitcoin has surged approximately 36% this year, ETH has only managed to stay just 0.02% above its price at the beginning of the year.
ETH’s 90-Day Downtrend
Over the last 90 days, Ethereum has seen a 34% drop, whereas Bitcoin’s price decline has been limited to 15%. The ETH/BTC ratio has dropped approximately 22% in this period, hitting a multi-year low of 0.04057. This indicates a lack of demand for Ether, as investors show a clear preference for Bitcoin.
Impact of ETFs on Ether and Bitcoin
The disparity in performance can be attributed to the varying success of ETFs for these cryptocurrencies. Since the approval of spot Bitcoin ETFs by the SEC on January 10, they have outperformed their Ethereum counterparts. According to Glassnode, the impact of Ethereum ETFs on ETH’s price is minimal, contributing to just 1% of the spot volume, while Bitcoin ETFs account for 8% of BTC’s spot volume. This suggests a far greater investor appetite for Bitcoin ETFs compared to Ethereum ETFs.
Bitcoin’s Dominance in the Market
Bitcoin’s market dominance has been on a steady rise throughout 2024, reaching a 40-month high of 58% on August 5. This indicates that Bitcoin is strengthening against other altcoins, including Ether. Market dominance measures the market capitalization of Bitcoin relative to the overall crypto market and is a useful indicator of market sentiment. With Bitcoin’s dominance increasing, ETH’s value against BTC is expected to keep falling, reflecting investors’ stronger bullish sentiment towards Bitcoin.
Ethereum’s Onchain Metrics
Another critical factor for Ethereum’s underperformance is its sluggish onchain metrics. The number of active addresses on the Ethereum network has decreased by 7.7% over the past 90 days, with the current 30-day average standing at 430,250 daily active addresses. This is a stark contrast to the peak of 686,350 active addresses recorded in May 2021. This decline in active addresses suggests reduced blockchain activity and lower demand for Ether.
DApp Activity on Ethereum
The decrease in active wallets also affects the usage of decentralized applications (DApps) on the Ethereum network. Data from DAppRadar shows a 19% decline in active addresses for Ethereum DApps over the past 30 days. In comparison, competing blockchains like Solana and Tron have seen significant increases in unique active wallets, with growth rates of 257% and 343%, respectively.
Future Outlook for Ethereum
For Ethereum to recover and rise above the $2,400 mark, it will need sustained network growth, increased Ether transactions, and higher DApp usage. Without these improvements, ETH is likely to continue lagging behind Bitcoin in terms of price performance.
This article provides a general overview and should not be taken as legal or investment advice. The views expressed are those of the author and do not necessarily reflect the views of Cointelegraph.
