Ethereum's Stagnation: The Hidden Factor in Bitcoin's Bull Run

In the ever-evolving world of cryptocurrency, Bitcoin's recent rally to $84,000 has left many investors disappointed. The reason? Ethereum's stagnation over the past 2.5 years. Cryptocurrency analyst Benjamin Cowen has pointed out that while Bitcoin has seen a 265% increase in value, Ethereum's price has remained flat, a stark contrast that has significantly impacted investor sentiment.

Cowen attributes Ethereum's underperformance to several key factors, including monetary policy shifts, particularly the Federal Reserve's quantitative tightening. This policy has had a significant impact on the cryptocurrency market, with many investors expecting altcoins like Ethereum to outperform Bitcoin in a bull market. However, this has not been the case, and the fading Bitcoin dominance has hurt altcoin-heavy investors, making this cycle feel worse for them.

Cowen also points to the Advance-Decline Index of the top 100 cryptocurrencies, which has hit a new low, signaling continued weakness across altcoins. This contrasts sharply with the 2020-2021 period when "everything was going up," making the current cycle feel like the complete opposite for altcoin investors. The Fed's recent move to slow quantitative tightening, cutting Treasury redemptions from $25 billion to $5 billion, has not yet reversed the trend, as the Fed still maintains a $35 billion monthly cap on mortgage-backed securities reduction.

The implications of Ethereum's underperformance on the broader cryptocurrency market are significant, particularly for altcoin investors who expected better returns. Cowen's analysis highlights that Ethereum's flat price performance has been a key reason why many investors are disappointed despite Bitcoin's rally. The Advance-Decline Index of the top 100 cryptocurrencies hitting a new low signals continued weakness across altcoins, further disappointing investors who had hoped for better returns.

Cowen cautioned that quantitative tightening isn't over yet, as the Fed still maintains a $35 billion monthly cap on mortgage-backed securities reduction. This ongoing tightening could continue to pressure altcoins, further disappointing investors who had hoped for better returns.



In conclusion, Ethereum's stagnation over the past 2.5 years has been a significant factor in the disappointment felt by investors despite Bitcoin's rally. The underperformance of Ethereum relative to Bitcoin, coupled with the Federal Reserve's quantitative tightening, has had a significant impact on the broader cryptocurrency market, particularly for altcoin investors. As the market continues to evolve, it remains to be seen whether Ethereum will be able to break out of its stagnation and catch up to Bitcoin's performance.