By Key Points
- Ethereum price collapse sees ETH fall below 0.04 BTC for the first time in 3 years.
- ETH/BTC pair is down 53% since Ethereum’s Merge upgrade.
- Bitcoin maximalists predict Ethereum could plunge to 0.03 BTC.
- The anticipated “flipping” seems more distant than ever.
Ethereum (ETH) is in the middle of a significant price collapse, falling to its lowest point against Bitcoin (BTC) in over three years.
The Ethereum price collapse has raised concerns among investors and fans of the cryptocurrency, especially as the ETH/BTC pair continues to lose ground.
This sharp decline has cast doubt on Ethereum’s ability to surpass Bitcoin, a scenario that was once highly anticipated within the crypto community.
ETHBTC just traded on a 0.03 handle for the first time in 3.5 years (apr 2021) 👀
-53% since the merge in sep 2022
what stops this train? 🚂 pic.twitter.com/Olj6SGEiVe
— Alex Thorn (@intangiblecoins) September 15, 2024
Ethereum Price Collapse: A Long Fall From Glory
Ethereum has long been positioned as Bitcoin’s biggest rival, often touted as the cryptocurrency that would eventually trigger the “flipping”—a moment where Ethereum overtakes Bitcoin in market capitalization.
Back in 2017, during the ICO boom, Ethereum’s market value surged, nearly eclipsing Bitcoin. The speculation resurfaced in 2021 when the rise of decentralized finance (DeFi) and non-fungible tokens (NFTs) saw Ethereum regain momentum.
However, the Ethereum price collapse in 2024 paints a very different picture. Today, the ETH/BTC pair has fallen below the critical 0.04 BTC mark—a significant threshold Ethereum had held for over three years.
According to Galaxy Digital’s head of research, Alex Thorn, the ETH/BTC pair has dropped 53% since Ethereum’s much-hyped Merge upgrade in September 2022.
The Merge, which saw Ethereum transition from proof-of-work (PoW) to proof-of-stake (PoS), was supposed to be a turning point for the network, reducing energy consumption and setting the stage for improved scalability.
Despite these technological improvements, Ethereum’s price performance against Bitcoin has worsened, leading many to ask if Ethereum’s decline is just beginning.
Bitcoin Maximalists Predict Further Decline in Ethereum Price
The Ethereum price collapse has emboldened Bitcoin maximalists, who have long argued that Bitcoin is the superior asset.
Notably, Tuur Demeester, a prominent Bitcoin supporter, recently predicted that Ethereum could continue its decline and fall to 0.03 BTC.
This sentiment reflects growing doubt about Ethereum’s ability to hold its value against Bitcoin. For years, Ethereum enthusiasts believed that its broader utility as a platform for smart contracts, DeFi, and NFTs would eventually allow it to surpass Bitcoin. But Bitcoin’s appeal as a “store of value” has proven far more resilient, especially in times of market instability.
With Ethereum’s value dropping 53% since The Merge and continued uncertainty around its future price action, Demeester’s prediction of Ethereum dropping to 0.03 BTC could materialize if the market continues to favor Bitcoin.
Factors Contributing to the Ethereum Price Collapse
Several factors have contributed to the Ethereum price collapse:
Disappointing Post-Merge Performance: While The Merge was seen as a crucial upgrade, it hasn’t translated into the kind of price gains many were expecting.
Since transitioning to PoS, Ethereum has faced significant sell-offs, particularly from institutional investors who were banking on the success of the upgrade.
Weak ETF Market: Ethereum’s ETF market has not lived up to expectations. Earlier in 2024, Ethereum spot ETFs experienced substantial outflows, while Bitcoin ETFs gained momentum. The lack of investor confidence in Ethereum ETFs has exacerbated the price decline.
Bitcoin Dominance: Bitcoin’s dominance has only grown stronger, particularly after recent regulatory approvals and the increasing likelihood of a Bitcoin spot ETF being launched in the U.S. This has led to capital moving out of Ethereum and other altcoins into Bitcoin, further driving Ethereum’s price down.
Institutional Preference for Bitcoin: Large-scale institutional investors still favor Bitcoin over Ethereum due to its established role as a digital store of value. While Ethereum offers more utility, Bitcoin remains the preferred choice for long-term investors, which has influenced the ETH/BTC pair’s decline.
What’s Next for Ethereum?
The Ethereum price collapse may seem alarming, but it’s not necessarily the end of the road for Ethereum. Despite its drop against Bitcoin, Ethereum still holds a dominant position in the decentralized application (dApp) space, particularly within DeFi and NFTs.
Its PoS system also offers potential advantages in terms of scalability and lower energy consumption, though these benefits have yet to be fully realized.
For Ethereum to recover, several things need to happen:
Institutional Support: Ethereum needs to regain the confidence of institutional investors. A successful ETF launch or another major financial product tied to Ethereum could help attract long-term capital.
Technological Developments: Ethereum’s roadmap includes several upgrades aimed at improving its scalability and reducing transaction costs. If these upgrades succeed, Ethereum could regain momentum as a leading platform for blockchain-based applications.
Market Sentiment Shift: If market sentiment shifts back in favor of Ethereum, possibly due to the success of NFTs, DeFi projects, or other innovations on the Ethereum blockchain, it could recover some of its lost value against Bitcoin.
However, the short-term outlook remains uncertain. If the Ethereum price collapse continues, we could see Ethereum drop to 0.03 BTC or even lower, as some Bitcoin maximalists predict.
