Bitcoin Dominates Ether Like Never Before In 5 Years

Bitcoin crushes the hopes of Ether mercilessly. The ETH/BTC ratio has just hit its lowest level in five years, at 0.02193. A staggering drop of 39% in one year. For the first time since a halving, Ether is buckling under the weight of its older sibling. Why this historical inversion? Between being a refuge amidst macroeconomic turmoil and a repositioning of investors, Bitcoin consolidates its status as a safe haven. A deep dive into the mechanics of an unequal duel.

Halving and macro market: the explosive cocktail for Bitcoin and ETH?

Traditionally, Ether outperformed Bitcoin in the twelve months following this event. But this time, the scenario is reversing.

The cause: a tense economic climate. Trade war, persistent inflation, high bond yields… Investors are fleeing risk. The result? Gold reaches new heights, and Bitcoin, perceived as the “digital gold,” absorbs the capital.

Ethereum, on the other hand, pays for its status as a technological bet. While Bitcoin embodies stability, ETH remains tied to often-delayed promises of DeFi and smart contracts.

In 2024, patience is wearing thin. Glassnode’s data confirms this: the ETH/BTC ratio has dropped by over 50% since the halving, an unprecedented situation since 2019. A strong signal: during the storm, assets perceived as risky are sacrificed.

Worse still, this dynamic recalls a painful past for Ether. In the third quarter of 2019, the ratio plunged to 0.0164, marking a quarterly drop of 46%.

Today, history is repeating itself, but in a very different context.

The crypto market has matured, and institutions are present. Their appetite is clearly leaning towards Bitcoin, whose market cap reassures.

ETH Losing Momentum Against Altcoins: A Structural Problem?

But Ether’s decline is not limited to its face-off with Bitcoin. Even against other altcoins, the second cryptocurrency shows signs of fatigue.

Proof of this: the SOL/ETH (Solana/Ether) ratio has jumped by 24% since January, despite a difficult year for SOL. Translation? Investors prefer to bet on ecosystems perceived as more innovative, even if volatile. Ether, on the other hand, seems caught between its status as a pioneer and aggressive competition.

This underperformance raises questions about its future role. While Bitcoin positions itself as a safe haven, Ether struggles to embody a clear niche.

Network updates (like Ethereum 2.0) are slow to convince, and high transaction fees push developers towards alternatives. As a result, its technological leadership is no longer a given.

Finally, this dynamic reveals a shift in mentality among investors. In the face of uncertainty, diversification is no longer enough. They now prioritize high liquidity and managed risk assets.

Bitcoin, with its liquid market and growing institutional adoption (ETFs, regulations), meets these criteria. Ether, being more speculative, becomes a secondary choice.

The gap between Bitcoin and Ether is not just a question of price. It symbolizes a growing divide between security and innovation, between maturity and experimentation.

In 2024, the market has chosen: against headwinds, Bitcoin imposes itself as the ultimate bulwark. Ether, for its part, will have to redefine its value to reclaim its place. One certainty? In this game of crypto chess, King Bitcoin firmly retains its crown. For Raoul Pal, the wait is almost over for a BTC rally.