Ethereum has been struggling to keep up with Bitcoin in terms of price performance, with a significant 77% price crash against BTC since December 2021. Despite maintaining its dollar value, Ethereum’s long-term ratio against Bitcoin paints a grim picture for ETH holders. The inability to recover to its previous all-time high and the outperformance of Bitcoin in the market have led to comparisons of ETH to a “shitcoin” by traders and maximalists.
Santiment’s analysis reveals that Ethereum’s underperformance can be attributed to various factors. The implementation of Layer 2 solutions like Arbitrum and Optimism has diverted attention and investments away from the mainnet, causing a decline in activity on Ethereum. Additionally, complex roadmaps and communication issues surrounding major updates like The Merge have caused confusion among investors, making Ethereum less appealing compared to Bitcoin.
High gas fees and slow upgrades have further alienated users, pushing them towards alternative blockchains that offer more affordable and faster solutions. Regulatory uncertainties surrounding Ethereum’s security label have also played a role in its price struggles. Moreover, Ethereum lacks a clear investment narrative compared to Bitcoin’s reputation as digital gold, making it less attractive to investors.
The selling pressure from post-upgrade stake withdrawals has also limited Ethereum’s growth and momentum compared to Bitcoin. As newer blockchains like Solana and Cardano gain traction with their competitive offerings, Ethereum continues to face challenges in retaining user interest and investments.
In conclusion, Ethereum’s price struggles against Bitcoin can be attributed to a combination of technical, sentimental, and regulatory issues. With increasing competition from other blockchains and ongoing challenges in communication and user adoption, Ethereum will need to address these concerns to regain its position in the market.