The debut of spot Ethereum USD ETFs in the U.S. was supposed to be a game-changer. Yet, Bitcoin not only remains the front-runner but is also outperforming Ethereum at levels we have not seen before in past cycles.
Despite 99Bitcoins and other analysts forecasting a market boost from institutional money, reality didn’t match the hype. Ethereum is at a critical juncture.
“This shift challenges the long-held belief that network effects alone would maintain Ethereum’s dominance,” wrote financial analyst Wesley Kress to Twitter on Tuesday. “Ethereum is trading horrible this cycle and I think people are realizing it’s not the future.”
Solana Outshines Ethereum USD By Miles
Ethereum’s underperformance is glaring next to Solana’s rise.
Recently, the SOL/ETH pair leaped 10.75% in 24 hours, hitting 0.064 ETH on August 8, following the launch of spot Solana ETFs in Brazil. This surge is part of a broader comeback starting in June, with the pair rallying around 75% since then.
Where Ethereum has Solana beat is decentralization and fewer network outages; however, Solana is getting better at addressing those as well.
The fact is no one wants to use a slower, more expensive product like Ethereum.
SOLANA ETF BY VANECK!!!! pic.twitter.com/DmNbf1sNTs
— mert | helius | hSOL (@0xMert_) June 27, 2024
Spot Ethereum ETFs flopped upon their U.S. debut. Launched on July 23, they’ve hemorrhaged $387.7 million, per Farside Investors. Bitcoin ETFs, on the other hand, saw positive inflows in their first two weeks back in January.
Ethereum’s ETF rollout has floundered, especially alongside Bitcoin’s bullish launch.
Bitcoin’s appeal as a “store of value” overshadows Ethereum’s role in decentralized apps and smart contracts.
CoinGecko reports just six public companies holding Ether, compared to 29 for Bitcoin.
This only worsens when their are more efficient and technically superior products on the market like Solana, Sui, and Avalanche.
Technical Analysis: Ethereum’s Decline
Ether’s been sliding down, stuck in a descending channel against Bitcoin since September 2022. It made a feeble attempt to break free in May 2024, hitting 0.056 BTC, only to fall back by 30%. By August, it was scraping the channel’s lower trendline, eyeing a rebound to 0.050 BTC.
Altcoins usually thrive in Bitcoin bull runs, with cash flowing into riskier bets like Solana and meme coins PEPE and WIF. Not this time for Ethereum.
When Ethereum’s $ETH market cap is surpassed, potentially by Solana $SOL, it could revolutionize the entire altcoin industry. Solana’s performance this cycle suggests that this shift might happen sooner than expected. Over the past month, Ethereum has dropped 20%, while Solana… pic.twitter.com/PRd6C6PpmP
— Wesley Kress, MBA, MSOM 🟥 ⚡️ (@WesleyBKress) August 7, 2024
Ethereum’s slipping and being outpaced by Bitcoin and Solana.
Its spot ETFs were a dud, but what’s scariest of all is that it’s becoming more of an educational experiment whose esotericism only appeals to blockchain developers with Ph. Ds and not the everyday common person.
While we’ll always hold Ethereum at 99Bitcoins, it’s plain to see that it might severely underperform this next bull cycle.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
