March 27, 2024
Ethereum Dims Amidst Surging BTC and SOL Prices
Altcoins News

Ethereum Dims Amidst Surging BTC and SOL Prices

Ethereum bulls find themselves in a defensive position against a wave of criticism on Crypto X, prompted by observations that Ether’s (ETH) price has been lagging behind Bitcoin (BTC) and other robust altcoins recently.

The Ethereum to Bitcoin price chart, representing 1 Ether against 1 Bitcoin, temporarily dipped below 0.05 BTC on December 20, marking its lowest point in two years (since April 28, 2021), according to CoinMarketCap.

During the last bull market, the ratio reached a peak of 0.087 BTC on September 12, 2021, but has been on a downward trend since then. At the beginning of 2023, the ratio stood at around 0.072 but has continued to decline.

Critics on social media are attributing this trend to Ethereum’s transaction fees, claiming that these fees have made it more attractive for crypto users to explore alternative chains with lower fees. Bitcoin advocate Jason A. Williams remarked on December 20, “Ethereum is broken. You don’t have to pay those fees anymore. You have options.”

Data from BitInfoCharts indicates that Ethereum fees averaged around $11 on December 19, while Bitcoin fees were higher at approximately $32. In contrast, Solana’s fees consistently remain under $0.01, according to CoinCodex.

Even Vitalik Buterin, one of Ethereum’s creators, recently expressed concern, stating that Ethereum will likely “fail” unless transaction fees become more affordable, especially during bull markets.

However, some Ethereum supporters have staunchly defended the cryptocurrency. Anthony Sassano, host of the Ethereum show “The Daily Gwei,” insisted that Ethereum is undervalued in the current market. Ryan Sean Adams, co-host of “Bankless,” expressed surprise at the negative sentiment towards Ethereum, stating, “I never anticipated ETH would be viewed as a non-consensus underdog again, yet here we are. Long ETH 2024.”

Meanwhile, supporters of Solana (SOL) have highlighted its strong performance against other cryptocurrencies, including Ether, particularly over the past three months. SOL has surged by 12% to $83 in the last 24 hours, according to CoinMarketCap.

Some pundits have pointed to Solana surpassing Ethereum in decentralized exchange (DEX), stablecoin, and nonfungible token (NFT) trading volumes over both 24-hour and seven-day intervals this week. This recent price action has led some to suggest that Solana may eventually “flip” Ethereum.

However, Ethereum still leads in total value locked (TVL) on its network with $28 billion, while Solana ranks fifth in TVL at $1.15 billion, according to DefiLlama.

Additionally, Ethereum’s market cap/TVL (Mcap/TVL) ratio is 9.4 compared to Solana’s 30.45. Mcap/TVL is a commonly used metric to gauge a blockchain’s intrinsic value. With Ethereum’s lower value in this ratio, some argue that it may be undervalued relative to Solana.

Image by WorldSpectrum from Pixabay

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