Despite numerous upgrades and innovations roll out, Ethereum prices remain behind Bitcoin (BTC) by a large margin. Reports reveal that ETH is suffering from an astounding 77% price crash against BTC. This is a reduction that is likely to be driven by a mix of technology, macros, and emotionally driven factors. In particular, Santiment, an on-chain analytics platform, is identifying and breaking down the key reasons behind these price struggles.
Ethereum price savings against Bitcoin
On April 11, Santiment released a detailed report on Ethereum, highlighting its performance over almost four years and the reasons behind it. Ethereum was once revered as the cryptocurrency most likely to abdicate Bitcoin, but recently suffered a brutal price drop when measured directly against BTC.
According to Santiment's on-chain data, Ethereum has crashed about 77% against Bitcoin since December 2021. Although the dollar value of ETH has not completely collapsed, especially compared to other Altcoins, the long-term BTC/ETH ratio still paints a scary picture for Ethereum owners.
In particular, Ethereum failed to recover anywhere near the all-time high of November 2021, at $4,760. By contrast, Bitcoin has surged forward, regaining much of its market dominance, surpassing ETH at almost every time.
This disparity has led many traders and former maximalists to compare ETH to “shit.” Worse, various mid-cap to low-cap altcoins already outperform Ethereum in short-term, medium-term and long-term time frames, making it even more embarrassing to the world's second largest cryptocurrency by market capitalization. Based on Santiment's report, the ETH/BTC price ratio chart alone is sufficient to cause doubts and uncertainties among long-term holders.
Behind the scenes of Ethereum's price struggle
Beyond price action and market volatility, Santiment reveals that there are fundamental reasons why Ethereum's performance is degraded over the years. The key criticisms identified by analysts and traders include technical, sentimental and regulatory issues.
Ironically, Ethereum's Layer 2 solution is one of the leading drivers with low performance. L2 solutions such as Arbitrum, Optimism and Zksync cannibalize activities in the mainnet and receive investments from ETH while slugging investors' attention.
Second, Ethereum appears to be struggling with a complex roadmap and communication, leading to investor disruption. Major updates like The Merge and Shanghai are difficult for investors to understand, and ETH finds it less accessible than BTC.
Third, users continue to be unhappy with Ethereum's relatively high gas prices and slower deployment of key upgrades. This pushed them up to faster alternatives at a more affordable price, resulting in a significant reduction in adoption.
Another major reason for Ethereum's crash against Bitcoin is continued regulatory concerns. Unlike Bitcoin, which has a more established legal precedent, Ethereum faces constant uncertainty about whether it could be labeled as security.
Other points include ETH's lack of investment appeal. Bitcoin maintains the title as a stable digital gold, but Ethereum appears to be caught up in between, with no clear or compelling investment narrative. Additionally, new blockchains like Solana and Cardano attract a significant number of users with cheaper and faster solutions, ultimately pulling investments away from ETH.
The last reason Santiment has identified in the long-term price decline for Ethereum is the heightened sales pressure. The post-upgrade withdrawal of stakeholder ETH, compared to Bitcoin, limited growth and momentum, creating stable sell-side pressure.
