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The general interest in Bitcoin skyrocketed following the approval of eleven spot BTC ETFs in the United States in January this year. The lower chances of approval of a spot ETH ETF in the United States are not helping Ether’s case.
The digital asset market surprised investors in the past 24 hours as Bitcoin (BTC), the largest cryptocurrency by market capitalization, surged by almost 9% while altcoins also printed massive gains. However, Ether (ETH), the native cryptocurrency of the Ethereum blockchain, displayed underwhelming performance with a meager 3% increase in its price, as per the data from CoinMarketCap.
As a result, the ETH-BTC ratio has reached its lowest since April 2021, igniting a debate in the digital asset community on social media platform X.
ETH-BTC Ratio Follows Downtrend
The ETH-BTC ratio has been on a downtrend since, as pointed out by crypto analyst Dippy.eth on X. Notably, the analyst believes that tokens on the Ethereum blockchain will rally if the second-largest cryptocurrency outperforms Bitcoin in the near future. The analyst stated that the ETH-BTC bottom is coming soon, and once it reaches the bottom, altcoins will witness a rally as Bitcoin consolidates at higher price levels.
On the other hand, Bitcoin is currently above $66,000, and Ether stands below the $3,000 price range. TradingView data demonstrated that the ETH-BTC ratio stands at 0.04516 as of 8:35 a.m. ET on Thursday.
Meanwhile, CoinMarketCap data showed that BTC trading volume surged 55.7% in the past 24 hours, while ETH’s volume was up by only 22%. The market dominance of Bitcoin continues to climb with 54.7%, while Ether has failed to catch up with 15.1%.
Interestingly, the general interest in Bitcoin skyrocketed following the approval of eleven spot Bitcoin exchange-traded funds (ETFs) in the United States in January this year. The lower chances of approval of a spot ETH ETF in the United States are not helping Ether’s case.
As pointed out by finance lawyer Scott Johnsson, the US Securities and Exchange Commission (SEC) is looking for substantial reasons to deny the spot ETH ETF applications filed by leading asset management firms like BlackRock and Fidelity.
The regulator believes ETH to be a security, and Johnsson believes that it could argue that the applications are improperly filed as commodity-based trust shares. Senior Bloomberg analyst Eric Balchunas stated on social media platform X that the chances of ETH ETF approval are “slim to none”.
Additionally, in a report sharing the outlook for the crypto market in 2024, crypto exchange Coinbase predicted that in the first half of the year, institutional investors will remain focused on Bitcoin, “helped, in part, by pent-up demand from traditional investors seeking to enter this market”.
The surge in the popularity of Layer 2 and Layer 3 blockchain networks can also be considered a major reason for the decline in interest in Ethereum. Recently, Polygon Labs CEO Marc Boiron stated that “L3s exist only to take value away from Ethereum and onto the L2s on which the L3s are built.”
