Why Ethereum’s Price Is Lagging Behind Bitcoin and What to Expect in the Future
Cryptocurrency analysts are discussing the recent underperformance of Ethereum and why its price is not soaring as much as it used to. The two largest cryptocurrencies, Bitcoin and Ethereum, have been moving in opposite directions, causing confusion among investors. While Bitcoin has remained relatively stable at $68,957, Ethereum has fallen 7% to $2,525, according to data from CoinGecko.
This divergence is significant because Bitcoin and Ethereum typically rise and fall together. However, this time, the dynamic has changed. Ben Caselin, the chief marketing officer at crypto exchange VALR, explained that Ethereum has outperformed Bitcoin in previous cycles, but now the situation is different.
Bitcoin’s resilience can be attributed to two key factors: flows into spot Bitcoin ETFs and the continued rise in memecoin popularity. Additionally, the impressive rally of Solana, which has gained nearly 7% in the past week, has further contributed to the divergence trend. This trend started after spot Ether ETFs were launched in July.
Since the launch of spot Ethereum ETFs, the price of Ethereum has fallen by 36%, while Bitcoin has gained a modest 2%. Despite the excitement surrounding Ethereum ETFs, these financial products have struggled to gain the same level of traction as Bitcoin ETFs. Spot Ethereum ETFs have seen net outflows of over $504 million since July, while spot Bitcoin ETFs have seen inflows of around $22 billion since January.
Shauli Rejwan, the Managing Partner at Masterkey.VC, commented that regulators and traditional investors are more open to Bitcoin than Ethereum, at least for now. However, Ben Caselin noted that upcoming events like the US elections could create volatility, potentially benefiting the price of Ethereum in the short term. He also warned that these events could serve as an “exit liquidity” point for some investors.
Despite the recent decline, Rejwan remains cautiously optimistic about Ethereum’s future. He believes that Wall Street’s interest in spot Ethereum ETFs could materialize within six to ten months or potentially accelerate if a bull run begins.
In conclusion, Ethereum’s price is lagging behind Bitcoin due to various factors, including the rise of Solana and the lack of investor interest in Ethereum ETFs compared to Bitcoin ETFs. However, there is still hope for Ethereum’s future, especially if Wall Street becomes more interested in spot Ethereum ETFs. Investors should remain cautious and monitor upcoming events for potential volatility in the market.
