- ETH’s underperformance has taken it to its lowest level in years.
- Bitwise Executive Still Confident in ETH Price Reversal.
Ethereum (ETH) Relative valuation Bitcoin (BTC) Market concerns were sparked earlier this week when ETH/BTC fell below 0.04 for the first time in nearly four years.
This pair tracks the value of ETH against BTC, and its downtrend over the years shows the altcoin’s worrying underperformance.
In fact, ETH has offset its year-to-date gains, but BTC is up 40%, and ETH’s main competitor Solana (SOL) is up 18% since the beginning of the year.
ETH’s moment will come…
However, digital asset manager Bitwise is confident in a bullish price reversal for ETH in the long term. Bitwise CIO Matt Hougan is making a contrarian bet on ETH, highlighting a potential recovery following the US elections.
Some of his recent memo Please read this for investors:
“I think people are too quick to overlook the real success of Ethereum and the ecosystem that we’re already seeing.”
Hougan cited prediction site Polymarket, large stablecoins, and the DeFi space as the top bullish signals for the altcoin. In addition, increasing interest from BlackRock and other institutions has also been a big boost to ETH’s value.
He added that additional regulatory clarity in the DeFi space could boost altcoins, especially after the U.S. elections. He noted:
“As the November elections and regulatory clarity approach, we expect the market to re-evaluate Ethereum. As of now, it looks like a potential contrarian play through the end of the year.”
ETH’s Current Concerns
Market experts have cited several reasons for ETH’s relative underperformance compared to BTC.
David Duong, head of institutional research at Coinbase, said the current low prices are due to market structure, as market activity typically slows down during the summer months.
However, the poor performance of US spot ETH ETFs was also pointed out as a reason for the weakening ETH investment sentiment.
Unlike the US BTC ETF, the ETH product recorded a net loss. flow It has generated $606 million in sales since its launch in July.
According to Hogan, regulatory uncertainty has also weighed on ETH, especially with the US presidential election coming up with no clear winner.
He also added that the community’s concerns about ETH’s token economics have also contributed to the current issues.
For context, ETH yields fell to a four-year low after L2 pulled most of the volume from the L1-based layer through expansion, which has raised concerns among users, Hougan noted.
“Many people wonder if Ethereum is shooting itself in the foot by moving away from being a foundational layer 1 blockchain.”
Meanwhile, ETH/BTC was on the verge of breaking out of its multi-year downtrend channel.
Market analyst Benjamin Cowen said: expectation That means ETH/BTC could bottom out by the end of the year. At the time of writing, ETH is valued at $2,300, down 43% from its March high of $4,000.
Source: ETH/BTC, TradingView