As Bitcoin (BTC) hit a recent all-time high (ATH) of $98,310 today, the ETH/BTC trading pair fell to multi-year lows, raising questions about the relative strength of Ethereum (ETH), the second-largest digital asset.

What causes Ethereum’s impoverished performance relative to Bitcoin?

Bitcoin’s recent ATH that emerged earlier today is approaching $2,000 from the desired $100,000 figure. However, BTC’s continued dominance resulted in altcoins, particularly Ethereum, underperforming throughout the year.

The weekly chart below shows that the ETH/BTC trading pair has fallen to a multi-year low of 0.0331 – a level last seen in March 2021. As of December 2021, the trading pair has not made a recent higher high, reflecting a decline of over 60%.

The pair’s losses have accelerated since July 2024, coinciding with a rally in Bitcoin’s price amid growing optimism about the prospects of pro-cryptocurrency Republican candidate Donald Trump in the US presidential election.

The success Bitcoin exchange-traded funds (ETFs) have also contributed to the institutional preference for BTC over other cryptocurrencies. Currently, BTC ETFs have combined net assets of over $100 billion.

While Ethereum ETFs have also received regulatory approval, they have not matched the success of their Bitcoin counterparts. For example, US Ethereum spot ETFs have accumulated only $8.96 billion in total net assets to date.

Additional factors such as Bitcoin’s halving in April 2024 – reducing miner rewards from 6.25 BTC to 3.125 BTC – further strengthened the BTC supply shortage narrative. On the other hand, Ethereum’s rising issuance rate has led some experts to question its “ultrasonic money” status.

Additional factors such as Bitcoin halving in April – which reduced miner rewards from 6,250 BTC to 3,125 BTC – further strengthened the narrative of a supply shortage for digital assets. In contrast, Ethereum growing emission rate has led some experts to question the status of “ultrasonic money”.

When will Ethereum make up for its losses against BTC?

As the ETH/BTC trading pair hits recent lows, Ethereum investors want to know when ETH might recover its losses. Several analysts have shared their views on X.

Crypto analyst @CryptoGemRnld recently identified two forceful support zones: trend line support and demand field zone. According to the analyst, since 2017, the ETH/BTC pair has historically bounced around these levels, often leading to altcoin seasons.

Experienced trader Peter Brandt feels similarly suggested that the ETH/BTC ratio may be approaching the bottom. Brandt’s analysis predicts a potential trend reversal in December when the trading pair begins its uptrend.

This perspective is confirmed by the latest data indicates that ETH may be undervalued at current prices. The circumscribed inflow of ETH to exchanges combined with the lack of significant profits suggests that ETH bulls are refraining from further increases.

Additionally, spot ETH ETFs have appeared recording a significant inflow of funds that attracted over $515 million between November 9 and November 15. At press time, ETH was trading at $3,333, up 7.4% in the last 24 hours.

Featured image from Unsplash, charts from Tradingview.com