Ethereum's Price Plummets 77% Against Bitcoin Since 2021
1min read Ethereum, once hailed as a potential rival to Bitcoin, has experienced a significant decline in its price relative to Bitcoin. According to on-chain analytics platform, the price of Ethereum has plummeted by approximately 77% against Bitcoin since December 2021. This decline is attributed to a combination of technical, macro, and sentiment-driven factors. Despite the dollar value of ETH not collapsing as drastically as other altcoins, the long-term BTC/ETH ratio indicates a challenging outlook for Ethereum holders.
Ethereum's failure to recover to its November 2021 all-time high of $4,760, coupled with Bitcoin's surge in market dominance, has led to comparisons of ETH to a "shitcoin." Additionally, various mid to low-cap altcoins have outperformed Ethereum over different timeframes, further exacerbating the situation for the world’s second-largest cryptocurrency by market capitalization. The ETH/BTC price ratio chart alone is enough to instill doubt and uncertainty among long-term holders.
Beyond price action and market volatility, there are fundamental reasons for Ethereum’s underperformance. One key driver is Ethereum’s Layer 2 solutions, which are reportedly cannibalizing activity on the mainnet. Solutions like Arbitrum, Optimism, and zkSync are taking investments from ETH while spreading investor attention thin. Additionally, Ethereum struggles with complex roadmaps and communication, leading to investor confusion. Major updates like The Merge and Shanghai have been difficult for investors to comprehend, making ETH feel less accessible than BTC.
Users remain frustrated by Ethereum’s relatively high gas fees and the slow rollout of key upgrades, pushing them toward more affordable and faster alternatives. This has significantly reduced adoption. Another primary reason for Ethereum’s crash against Bitcoin is ongoing regulatory concerns. Unlike Bitcoin, which has a more established legal precedent, Ethereum faces constant uncertainty about whether it could be labeled a security. This regulatory uncertainty adds to the challenges faced by Ethereum.
Ethereum also lacks a clear investment narrative, making it less appealing to investors compared to Bitcoin, which is seen as a stable digital gold. Newer blockchains like Solana and Cardano are attracting a significant number of users with cheaper and faster solutions, ultimately pulling investments away from ETH. The final reason identified for Ethereum’s long-term price descent is rising selling pressure. Post-upgrade withdrawals of staked ETHs have created steady sell-side pressure, limiting growth and momentum compared to Bitcoin.
