Ether (ETH), the second largest cryptocurrency, has seen a decline of 39% this year compared to bitcoin (BTC), the largest, resulting in the lowest ETH/BTC ratio in nearly five years.
Currently, 1 ETH is worth 0.02191 BTC, the lowest since May 2020, when ether was around $200 and bitcoin was just below $10,000. Today, the price of ETH is approximately $1,800, while BTC is around $82,000.
This downturn is particularly striking as it’s the first time ETH has underperformed BTC in the 12 months following a bitcoin reward halving. On April 20, 2024, the reward given to bitcoin miners for confirming blocks was cut in half to 3.125 BTC.
Historically, in previous halving cycles, ether has outperformed bitcoin in the year following a halving event. This time, however, the ratio has plummeted by over 50%.
This relative decline marks one of the worst quarterly performances for ether against bitcoin in several years, as per data analysis. The last instance of ether’s performance being this poor was in the third quarter of 2019, when the ratio dropped to 0.0164, reflecting a quarterly decline of 46%.
This ongoing decline mirrors the lackluster performance seen in 2019 and further underscores ether’s relative weakness, particularly in contrast to other layer-1 assets. The SOLETH ratio, which evaluates the value of Solana’s SOL against ether, has risen 24% year-to-date to 0.07007. This suggests that SOL has significantly outperformed ether in 2023, even though the token itself has declined 35% this year.