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In the cryptocurrency market, Bitcoin (BTC) 
$103,849 and Ethereum (ETH) 
$2,586 remain the largest assets by market value. However, in the past two years, Ethereum’s performance has lagged behind Bitcoin. Both assets have experienced significant price fluctuations, with ETH underperforming compared to BTC.
Ethereum’s Decline Against Bitcoin
According to CryptoQuant data, Ethereum has underperformed Bitcoin by 44% over the past two years. This decline began in the period following “The Merge,” when Ethereum transitioned from a Proof of Work (PoW) mechanism to a Proof of Stake (PoS) mechanism. Since this process, Ethereum has struggled to keep pace with Bitcoin.
The ETH/BTC price is at its lowest level since April 2021, standing at 0.0425. Even positive news, such as the approval of Spot ETFs in 2024, has not been enough to correct ETH’s weak performance against Bitcoin.
Differences Between Ethereum and Bitcoin
Ethereum and Bitcoin have shown different trends in network fees and transaction activities in recent months. Ethereum experienced a drop in network fees after the Dencun upgrade, leading to a decrease in network activity. For example, Ethereum’s transaction count fell from 27 transactions per second in June 2021 to 11, one of the lowest levels since July 2020.
Bitcoin, on the other hand, saw an increase in both transactions and fees during the same period. This increase was driven by developments like Bitcoin Ordinals and Runes, which raised the demand for block space and consequently increased transaction costs.
ETH/BTC MVRV Ratio Analysis
The Market Value to Realized Value (MVRV) ratio, analyzed over two years, highlights the growing disparity between Ethereum and Bitcoin. Ethereum’s MVRV ratio is slightly below 1.16%, while Bitcoin’s MVRV ratio is above 14%. This difference illustrates how much ETH has lagged behind BTC.
According to CryptoQuant analysis, “The MVRV ratio measures the difference between an asset’s current market value and its realized value, revealing investors‘ profit or loss status.”
BTC holders are currently making over 14% profit, while ETH holders are recording over 1% loss.
In light of this data, the challenges Ethereum faced post-PoS transition, along with declines in network activity and fees, have reduced the deflationary pressure on the asset. Conversely, Bitcoin’s recent network activities and rising transaction fees have helped Bitcoin holders maintain profitable positions.
