ETH/BTC Ratio Fresh Lows Ignite New Debate on Investing in ETH
Speculators still anticipate ETH reaching $4,000 by 2025.
Ethereum [ETH] has been weakening against Bitcoin for three years. The ETH/BTC ratio serves as a key indicator that tracks the relative price performance against BTC. Recently, it marked a new low of 0.022.
Commenting on the prolonged decline, Alex Thorn, head of research at Galaxy Digital, stated, “Ether has dropped 74% against Bitcoin since the transition from proof-of-work to proof-of-stake.”
In fact, some members of the community have even suggested that a return to proof-of-work (BTC) could once again support Altcoin values. Is ETH worth betting on?
For Quinn Thompson, founder of hedge fund VC Lekker Fund, he believes that ETH “is not worth investing in.” He cited the decline in network activity, among other reasons.
“There is no doubt that $ETH has completely disappeared as an investment. A network with a market capitalization of $225 billion is seeing declines in trading activity, user growth, and fees/revenue. There is no investment case here.”
He added that while the network has utility, it lacks investment appeal. Nic Carter, partner at Castle Island Ventures and co-founder of data aggregator Coinmetrics, responded to this viewpoint.
In fact, Carter blamed L2s for killing ETH’s value, stating, “The primary reason is the greed of L1s; Eth L2s are siphoning value, and the social consensus is that excessive token creation is A-OK. ETH is buried in an avalanche of its own tokens. Dying by its own hand.”
According to Thompson, during the 2023-2024 bull cycle, the ETH/BTC ratio has declined by double digits and could worsen during a bear cycle.
Recent ETF flows also show a misalignment between the two leading crypto assets. For the U.S. spot BTC ETF, these products recorded over $1 billion in inflows over ten consecutive days (with $93 million in outflows last Friday).
On the other hand, since February 20, the U.S. spot ETH ETF has seen inflows on only two days. In March, they experienced over $400 million in outflows.
In short, negative sentiment on social media appears to reflect institutional investors’ appetite for altcoins.
That said, weak flows cannot derail ETH’s recovery odds. Regarding predictions on Polymarket, bettors’ target for ETH in 2025 is $4,000 (with a peak amount of $710K). The second highest volume is $5K.
For Deribit option traders, expectations for the $4K target are set until September (with a 10% chance). At the time of writing, ETH is valued at $18,700, down 54% from its $4,000 in December.
