Ethereum's Price Drops 10% as Bitcoin Dominance Grows

Since its launch in 2015, Ethereum has outperformed Bitcoin on only 15% of trading days, according to data shared by analysts. This statistic highlights the dominance of Bitcoin in the cryptocurrency market, particularly in recent years. Ethereum had brief periods of outperforming Bitcoin, notably between mid-2015 and mid-2017, and again from late 2019 to early 2020. However, since early 2020, Bitcoin has maintained its market dominance, with the ETH/BTC ratio dropping to a five-year low of 0.018, the lowest level since December 2019.

On April 9, 2025, Ethereum's price dropped to around $1,400, shedding nearly 10% in 24 hours. In contrast, Bitcoin fell by 6% to $75,000 but remains up nearly 275% from its 2017 bull cycle high, while Ethereum has slipped below its previous 2018 peak. This performance gap has raised concerns among Ethereum supporters, with some analysts pointing to stagnation in the number of active addresses on Ethereum’s mainnet over the past four years. Despite this, there is growth in activity on layer-2 networks such as Arbitrum and Optimism, which are helping to scale Ethereum and now hold significant value locked.

Ethereum’s transaction fees have also plummeted to their lowest level since late August, averaging just $0.41 per transfer. This significant decrease indicates reduced congestion on the network, meaning fewer users are competing to process transactions. Historically, low transaction fees on the Ethereum network have signaled potential bullish sentiment for its long-term price outlook. However, some venture capitalists have blamed layer-2 networks for Ether’s waning investment appeal, arguing that these networks are siphoning value from Ethereum’s base layer while giving little back. Additionally, the Ethereum community’s acceptance of excessive token creation has been criticized as a factor contributing to the decline in Ether’s value.

Crypto venture capitalist Nic Carter of Castle Island Ventures pointed to two key issues undermining Ether’s value: the rise of layer-2 scaling networks and unchecked token issuance. He argued that “greedy Eth L2s” are siphoning off value from Ethereum’s base layer while giving little back. He also criticized the Ethereum community’s acceptance of excessive token creation, claiming that “ETH was buried in an avalanche of its own tokens. Died by its own hand.” Carter’s comments followed a similarly stark assessment from Quinn Thompson, founder of Lekker Capital, who declared that Ethereum is “completely dead” as an investment. Thompson cited declining transaction activity, reduced user growth, and falling network revenues as signs that ETH no longer offers a strong investment case, despite its utility as a blockchain platform.

Back in September 2024, Carter warned that Ethereum’s fee revenue had plummeted by 99% over six months as L2s captured user activity and revenue without contributing to Ethereum’s base layer. This analysis underscores the challenges Ethereum faces in maintaining its market position against Bitcoin and other emerging cryptocurrencies. Despite these concerns, the long-term outlook for Ethereum remains uncertain, with some analysts predicting a potential recovery in its value as layer-2 networks continue to develop and scale the Ethereum ecosystem.