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The ratio between Ethereum 
$2,504 and Bitcoin 
$103,635 has fallen to its lowest level in five years, creating significant ripples in the cryptocurrency market. Market experts highlight factors such as Ethereum’s weak price performance, increasing competition, and changing investor preferences as catalysts for this decline.
Performance Decline and Competitive Factors
Cryptocurrency expert Eric Wall indicates that the sharp drop in the Ethereum/Bitcoin ratio stems from Ethereum’s poor performance in the market. Despite Bitcoin nearing a price of $100,000, Ethereum has dipped below $2,000, significantly diminishing investor interest.
Observers note that Ethereum struggles to compete against rival blockchains offering lower transaction fees and higher speeds, gradually eroding its market share. The emergence of next-generation blockchains with user-friendly features is seen as one of the most significant developments undermining Ethereum’s position.
Post-Merge Effects and Investor Preferences
Ethereum’s Merge update in recent years initially generated high expectations. However, Eric Wall argues that the Merge has not played a decisive role in the drop of the Ethereum/Bitcoin ratio. He believes the core issue lies in Layer 2 solutions failing to integrate with the Ethereum mainnet.
The independent value appreciation of Layer 2 tokens has made it difficult for Ethereum’s network value to be fully reflected. Alongside this, the growth performance of DeFi projects falling short of expectations has led to diminishing outlooks towards Ethereum.
Macroeconomic fluctuations have further highlighted the disparity between Bitcoin and Ethereum. During times of geopolitical risk and economic uncertainty, investors prefer Bitcoin as a “safe haven,” while positioning Ethereum as more suitable for periods of market stability.
Recently, the increase in Ethereum’s transaction volume has caused short-term price movements. However, this surge has not been sufficient to alter investors’ long-term perspectives. Market participants still exhibit a cautious attitude regarding Ethereum’s future.
Looking at the broader picture, the decline in the Ethereum/Bitcoin ratio is influenced not only by sudden market movements but also by long-term trends. Technological advancements, the rise of new projects, and changing investor behaviors are likely to remain influential in the coming period.
