Ether (ETH) started the year strongly but began tapering off in mid-March. Although the ETH picked momentum in mid-May amid anticipation of the approval of spot Ethereum ETFs in the United States, it has underperformed Bitcoin (BTC).
ETH has surged approximately 60% over the last 12 months compared to BTC’s 87% gain in their respective USD pairs.
Ether, Bitcoin year-to-date performance. Source: TradingView
A new Digital Assets: Insights and Market Trends report, a joint publication from CME Group and Glassnode, reveals some of the reasons why ETH has been underperforming BTC throughout 2024, as discussed below.
Ether continues to trend lower against BTC in 2024
Data from Cointelegraph Markets Pro and TradingView reveals that Ether has experienced relatively deeper corrections in 2024, with the largest drawdown being 31% between March 12 and May 1. In comparison, Bitcoin dropped by 23% over the same period.
ETH/USD daily chart and BTC/USD daily chart. Source: TradingView
Zooming out, the drawdown profile of Ether has experienced relatively deeper corrections compared to Bitcoin, with the largest drawdown in the 2022-24 cycle being -42% thus far. Previous cycles have seen corrections exceeding -65% during both the early and later phases of macro bull markets.
The Glassnode-CME Group report also noted that the “ETH/BTC ratio has continued to decline” during the 2023-24 cycle, suggesting that the general investor risk appetite is still low for the current cycle.
According to the chart below, the ETH/BTC ratio has trended lower since the Merge, marking a period where Bitcoin outperforms Ethereum, a scenario that is still playing out at the moment.
ETH/BTC ratio. Source: Glassnode
The report records a number of reasons for Ether’s underperformance, including the approval of spot Bitcoin ETFs in the US in January 2024 and the increasing competition from other proof-of-stake blockchains.
“Nevertheless, with the inauguration of U.S. Spot ETFs for Ethereum, this may create a catalyst for a reversal in this downtrend.”
ETH Realized volatility in 2024 remains below previous cycles’
Using onchain metrics from market…
..
