Ethereum, the world’s second-largest cryptocurrency by market capitalization, has plunged below a psychologically significant threshold against Bitcoin, hitting its lowest level in three and a half years. On September 15, 2024, the ETH/BTC ratio broke below the 0.04 BTC mark for the first time since April 2021, marking exactly two years since Ethereum’s monumental transition from proof-of-work to proof-of-stake.
TL;DR
- ETH/BTC ratio drops below 0.04 BTC for the first time since April 2021
- Ethereum has lost 53% against Bitcoin since The Merge on September 15, 2022
- Bitcoin trades at approximately $59,182 while ETH struggles near $2,320
- Spot Ethereum ETF outflows and reduced DeFi activity contribute to weakness
- Analysts debate whether ETH can recover or if the decline represents a structural shift
A Milestone Day With Bitter Irony
The timing is particularly painful for Ethereum supporters. September 15, 2024, marks the second anniversary of The Merge, the upgrade that transformed Ethereum from an energy-intensive proof-of-work blockchain into a more environmentally friendly proof-of-stake network. What was supposed to be a catalyst for Ethereum’s ascent has instead coincided with a relentless decline against its larger rival.
Alex Thorn, head of research at Galaxy Digital, highlighted the grim milestone on social media: the ETH/BTC pair has shed a staggering 53% of its value since The Merge was executed on September 15, 2022. The ratio traded with a 0.03 handle for the first time in three and a half years, a far cry from the optimism that surrounded Ethereum during its earlier rallies.
The decline represents a dramatic reversal from the narrative that dominated crypto markets during the ICO boom of 2017, when Ethereum came perilously close to flipping Bitcoin by market capitalization. Back then, the ETH/BTC ratio approached 0.15, and proponents spoke confidently about the “flippening” — the hypothetical moment when Ethereum would overtake Bitcoin as the most valuable cryptocurrency. Today, that prospect seems more distant than ever.
Spot ETF Disappointment Weighs on Sentiment
Ethereum’s underperformance against Bitcoin accelerated after the launch of spot Ethereum ETFs in the United States in July 2024. Unlike the wildly successful Bitcoin ETFs, which attracted billions in net inflows within months of their January launch, the Ethereum equivalents have been characterized by significant outflows.
The Grayscale Ethereum Trust (ETHE) conversion, in particular, has generated substantial selling pressure as investors who were locked into the trust at a premium took the opportunity to exit. Net outflows from Ethereum ETFs have consistently exceeded new inflows, creating a structural headwind for ETH price appreciation that shows little sign of abating.
This dynamic stands in stark contrast to the Bitcoin ETF narrative, where institutional adoption through regulated investment vehicles has been a primary driver of BTC price strength throughout 2024. The divergent ETF performance tells a story of two cryptocurrencies heading in increasingly different directions in the eyes of institutional capital.
Broader Market Stagnation
The ETH/BTC collapse comes amid a broader period of market stagnation for cryptocurrencies. Bitcoin itself has struggled to maintain upward momentum, trading around $59,182 on September 15, down roughly 1.4% over the previous 24 hours. The overall crypto market is in a holding pattern ahead of a crucial week that includes the Federal Reserve’s interest rate decision, with traders reluctant to make significant bets before receiving clarity on monetary policy direction.
Altcoins have generally followed Ethereum’s weak lead, though a few outliers have posted notable gains. Celestia’s TIA token surged over 10% to reach $4.92, driven by growing enthusiasm for the modular blockchain thesis and increasing adoption of Celestia’s data availability layer by other blockchain projects.
From Flippening to Halvening
The narrative shift around Ethereum is perhaps best captured by the changing vocabulary of crypto analysts. Where once the discussion centered on when Ethereum would “flip” Bitcoin, the conversation now focuses on how much further ETH might fall relative to BTC. Bitcoin maximalist Tuur Demeester has predicted that Ethereum could crash to as low as 0.03 BTC, a level that would represent a devastating collapse from its historical range.
The reasons for Ethereum’s relative decline are multifaceted. The Merge itself, while technically successful in reducing energy consumption by over 99%, did not immediately deliver the economic benefits that many proponents predicted. Staking yields have compressed as more ETH has been locked, and the deflationary supply narrative has been undermined by periods of network inactivity where ETH supply actually increases.
Meanwhile, Bitcoin has benefited from a clear and compelling narrative around institutional adoption, regulatory acceptance via ETFs, and its role as “digital gold” in an era of monetary uncertainty. Ethereum, by contrast, faces the challenge of articulating a similarly powerful story that resonates with both retail and institutional investors.
Why This Matters
The ETH/BTC ratio is one of the most closely watched metrics in cryptocurrency, serving as a barometer of risk appetite and relative conviction in the two largest digital assets. A sustained break below 0.04 BTC would signal a fundamental shift in market dynamics, suggesting that investors increasingly view Bitcoin and Ethereum not as complementary assets in a diversified crypto portfolio, but as competitors with a clear winner emerging. For the broader altcoin market, Ethereum’s weakness is an ominous signal, as ETH typically sets the tone for the rest of the sector. The second anniversary of The Merge was supposed to be a celebration — instead, it has become a moment of reckoning for Ethereum’s most ardent supporters.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency markets are highly volatile and you should always conduct your own research before making investment decisions.