Ethereum has underperformed bitcoin by 44% since The Merge, according to research from Cryptoquant. Despite significant upgrades and the recent approval of ethereum spot exchange-traded funds (ETFs), the cryptocurrency continues to face challenges relative to bitcoin.
Ethereum Underperforms Bitcoin 2 Years After The Merge, According to Cryptoquant Data
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Cryptoquant: Ethereum Underperforms Bitcoin by 44%
Ethereum’s transition to a proof-of- stake ( PoS) blockchain, known as The Merge, took place nearly two years ago on Sept. 12, 2022. Since then, ethereum has consistently underperformed bitcoin, with the ETH/ BTC price ratio now standing at 0.0425, its lowest level since April 2021.
According to research from cryptoquant.com, ether has seen a further 18% decline following the approval of its spot ETF in July 2024. These figures reflect ongoing concerns about ethereum’s relative market performance and its inability to catch up to bitcoin despite notable network developments.
Cryptoquant’s researchers suggest that Ethereum’s weaker network activity compared to Bitcoin’s network is a key factor in its underperformance. Total transaction fees on the Ethereum network have declined after the Dencun upgrade, which significantly reduced transaction costs.
Additionally, Ethereum’s transaction count has dropped from a peak of 27 transactions per second in June 2021 to just 11, marking one of the lowest levels since July 2020. In contrast, Bitcoin has experienced an all-time high in transactions, driven by new activity on its network, including inscriptions, runes, and layer two ( L2) solutions.
Ethereum’s supply dynamics have also contributed to its continued decline. The total supply of ETH has been steadily increasing since early April 2024 and now stands at 120.323 million ETH.
This growth, according to Cryptoquant’s report, reverses the deflationary trends seen immediately after The Merge and could further impact ether’s market position relative to bitcoin in the coming months. Cryptoquant researchers conclude that ETH would need to fall an additional 50% to be considered undervalued in relation to bitcoin
What do you think about the analysis from Cryptoquant? Share your thoughts and opinions about this subject in the comments section below.
