What happened?
Ethereum has only outperformed Bitcoin on 15% of trading days since its launch in 2015, indicating it has struggled to keep pace with the leading cryptocurrency. Although Ethereum saw brief periods of dominance from mid-2015 to mid-2017 and late 2019 to early 2020, Bitcoin has maintained a stronghold on the market since early 2020. Recently, the ETH/BTC ratio fell to a five-year low, signaling Ethereum’s ongoing challenges against Bitcoin’s market presence.
Who does this affect?
This situation impacts Ethereum investors, developers, and enthusiasts who have seen Ethereum underperform compared to Bitcoin. It affects traders and crypto-market participants who rely on the ETH/BTC ratio for investment decisions. Additionally, Ethereum-based projects and layer-2 networks are influenced by these dynamics, as they navigate issues related to scaling and value distribution on the blockchain.
Why does this matter?
The continued dominance of Bitcoin over Ethereum could influence investor sentiment and market strategies, as Ethereum’s struggles may lead to reduced confidence in its long-term value. Furthermore, the rise of layer-2 solutions highlights a shift in how blockchain scaling is approached, potentially drawing attention and investment away from Ethereum’s base layer. This shift could lead to changes in how decentralized applications are built and used, impacting the broader crypto ecosystem.