While Bitcoin‘s price continues to climb alongside altcoins, Ethereum, the largest altcoin by market value, shows minimal signs of life. This is concerning given Ethereum’s vast ecosystem, transition to Proof of Stake (PoS), and the negative inflation that should theoretically bolster its value. However, Ethereum’s price does not seem to be buoyed by Bitcoin’s rise, indicating that a continuous increase in BTC’s price is not guaranteed to support Ethereum.
Since October, Ethereum’s price has only increased by about 45%, despite interest from major institutions like Fidelity and BlackRock in launching spot ETH ETFs. Many issuers are eager to secure ETH ETF approvals following successful BTC ETF launches, laying the groundwork for future ETH ETFs. Yet, Ethereum’s price appears indifferent to these developments.
In comparison, Ethereum’s competitor Solana has seen over 310% growth in just two months, while the ETH/BTC trading pair is at its lowest in 18 months. This suggests that Ethereum’s modest 45% rise against the dollar is insignificant when compared to its performance against Bitcoin.
Worse still, the ETH/BTC ratio is testing the support of its neckline, hinting at potential larger losses if a breakdown occurs. Although this does not mean Ethereum is dead, it certainly indicates a weak sign of life.
Despite criticisms about its price, Ethereum’s robust network fundamentals and massive ecosystem may keep it viable for a long time. With over $26.45 billion in Total Value Locked (TVL), Ethereum’s network value is nearly 26 times greater than Solana’s, even though the latter has outperformed Ethereum in price metrics. TVL represents the total value of assets locked within the network.
Furthermore, Ethereum generates more revenue than both Avalanche and Solana combined, with nearly $3 billion in annual earnings, making it the only profitable network among its competitors. Increased transaction fees and high volume of transactions have also led to a rise in the number of tokens burned, potentially creating a strong price catalyst in the form of supply scarcity in the long term. Various fundamental factors suggest that Ethereum is not even at the beginning of a bull run, and interest could shift towards it following a BTC ETF approval. However, predicting the future is impossible, and technically, no one can say it’s impossible for Ethereum to one day become obsolete.