Bitrabo Editorial
Ethereum is currently stable, trading just above $2,400, with potential to exceed $3,000 in the future. However, it is still lagging behind Bitcoin, leading to a decline in the ETH/BTC ratio, which has reached its lowest point in 40 months.
ETH Struggles Against Bitcoin: ETH/BTC Ratio Hits 40-Month Low
Data from IntoTheBlock as of September 20 indicates that Ethereum is underperforming against Bitcoin, marking the lowest levels seen in over three years. This indicates a strong bullish sentiment in regard to Bitcoin, even with institutional interest in the cryptocurrency market.
Despite a recent approval allowing spot Ethereum ETFs to begin trading in July 2024, Ethereum remains sluggish. This regulatory move provides institutions a legal avenue to invest in ETH without incurring the high costs previously associated with purchasing Grayscale ETHE shares.
Previously, buying ETH required investments in Grayscale ETHE, which came with higher fees while the regulatory landscape for Ethereum was unclear. The newly approved spot ETFs, which prevent issuers from staking client-purchased coins, are regarded as a positive development.
The SEC has not yet formally classified ETH as a commodity akin to Bitcoin, although the Commodity Futures Trading Commission has repeatedly deemed it a commodity. This uncertainty persists as ETH’s value continues to fall in comparison to BTC, leading analysts to suggest that institutional investors are more optimistic about Bitcoin’s future, citing its lower volatility and higher stability relative to Ethereum.
Is Support in Sight for Ethereum?
While Bitcoin benefits from its established position as a transactional currency, Ethereum stands out as the pioneer of smart contracts, facilitating a broad range of innovations, including DeFi and NFTs.
Larry Fink, CEO of BlackRock, noted that the tokenization of real-world assets, predominantly occurring on Ethereum, is expected to reach substantial market capitalization, potentially hitting trillions. BlackRock has even introduced a product called BUIDL, which tokenizes U.S. Treasuries using Ethereum.
The question remains whether Ethereum can bounce back against Bitcoin. Analyzing the daily charts suggests a shift could be underway, particularly following a double-bar bullish pattern noted on September 18 and 19.
Currently, Ethereum appears to be gaining strength, having bounced from a key level on the Fibonacci retracement scale, signifying a potential upturn from the trading range observed between 2020 and 2021.