ETH/BTC ratio falls to all-time low as speculation grows over Bitcoin ETF approval

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Ethereum’s value relative to Bitcoin has fallen to all-time lows amid expectations of the imminent launch of a physical Bitcoin exchange-traded fund (ETF) in the United States.

Data from Paris-based crypto intelligence platform Kaiko shows that the ETH/BTC ratio has been steadily declining since the smart contract-driven blockchain moved to a PoS network in September 2022. In the past 24 hours, the indicator fell to its lowest value since May 2021 at 0.048.

📈The ETH/BTC ratio continues to fall, hitting its lowest point since May 2021. pic.twitter.com/1ghuoRGY2N

— Dessislava Ianeva (@DessislavaIane2) January 9, 2024

The ETH/BTC ratio is an important metric for evaluating Ethereum’s performance relative to Bitcoin. As this ratio increases, Ethereum will gain strength or maintain its value better than Bitcoin, indicating that the market favors Ethereum over Bitcoin.

Conversely, the decline in the ETH/BTC ratio suggests that Ethereum is underperforming compared to Bitcoin, which may indicate that investors are leaning towards the perceived safety of Bitcoin.

The ratio is more than just price fluctuations as it reflects changes in investor confidence and market sentiment between the two famous cryptocurrencies.

Bitcoin’s price performance has significantly outperformed Ethereum’s over the past year. The price of the leading cryptocurrency has increased by more than 170% during this period, reaching a 21-month high of over $47,000, while ETH’s gains have been relatively modest, rising by 74%.

BTC’s positive performance can be attributed to optimism in the surrounding markets and demand for a potential approval of a spot ETF. In the past few months, a number of asset management companies, including BlackRock, VanEck, Grayscale, etc., have actively cooperated with the U.S. Securities and Exchange Commission (SEC) applications, triggering speculation that these products may begin trading as early as January. 11.

Ethereum’s dismal price performance, on the other hand, is due to the launch of several futures-based digital asset ETFs last year. The ETFs made little splash in the market due to tepid demand, forcing asset manager CoinShares to describe ETH as the “least popular altcoin” compared to rivals like Solana.