What to know:
- Ether dropped to its lowest level against bitcoin since March 2021.
- Bitcoin climbed to a record high before President-elect Donald Trump’s inauguration.
- Ether has suffered in part from the popularity of the Solana blockchain for memecoin introductions.
As a researcher, I observed that on Sunday, Ether (ETH) dipped to its lowest point relative to Bitcoin (BTC) since March 2021. This second-largest cryptocurrency continued to experience losses against its dominant counterpart, Bitcoin.
One unit of Ether plummeted to approximately 0.03 Bitcoin on Sunday, marking nearly a 50% decrease compared to a year prior, while Bitcoin experienced a surge as the U.S. President-elect Donald Trump prepared for his inauguration. The value comparison between these two digital currencies, often referred to as their ratio, reached an all-time high of around 0.08 in the year 2022.
The value proposition of ETH has been waning compared to Bitcoin since then. On Monday, Bitcoin reached a new record high of over $109,000 and has yielded a 160% return for investors in the last year. In contrast, Ether has only managed a 40% increase and currently sits about 30% below its 2021 peak. Ether tends to surge when traders perceive advantages for the Ethereum blockchain, which was the pioneer of smart contracts and decentralized finance (DeFi) applications. However, it loses strength when investors favor Bitcoin or other blockchains instead.
Ethereum has struggled to keep up during this market cycle, especially since Solana has been growing in popularity thanks to the craze around meme coins and events like the launch of Trump’s official meme coin on Solana rather than Ethereum,” as explained by Min Jung, an investment analyst at Presto Research, via a message on Telegram.
In summary, World Liberty Financial’s recent acquisition of Ethereum (ETH) underscores Ethereum’s enduring attractiveness among institutional investors. As the only cryptocurrency other than Bitcoin that has an ETF, Ethereum appears poised to become a key focus following Bitcoin, according to Jung. It should be noted that World Liberty Financial is a crypto lending platform backed by Trump and his sons.
Meanwhile, it’s not just traditional investments that Bitcoin outperforms; it also does so in the digital assets market. The price of Bitcoin now equals approximately 40 ounces of gold, or equivalently, its value against the total market capitalization of gold stands at around 11.4%.
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2025-01-20 13:58