Traders often monitor the price ratios of leading assets — this is common practice across many markets. For example, the gold/silver ratio is an extremely popular tool in precious metals markets. It helps traders understand when silver is undervalued or overvalued relative to gold, and often serves as an additional catalyst for a trade. Some traders even use the gold/silver ratio as their main analytical tool.
In crypto markets, the ETH/BTC ratio, which shows how many BTC you can buy with one ETH, serves a similar purpose. It indicates when ETH is relatively strong or weak compared to the world’s leading cryptocurrency.
The ETH/BTC ratio peaked back in 2017 during the first altcoin boom. At that time, one ETH could buy 0.1563 BTC. After this peak, ETH started losing its relative strength as thousands of new coins entered the market and created competition for Ethereum.
In September 2019, the ETH/BTC ratio fell to 0.0161 — a level that marked a long-term bottom. By the end of 2021, it had risen to 0.0883. Investors who bet on ETH being undervalued in the second half of 2019 were well rewarded — both in dollar and Bitcoin terms.
Unfortunately for Ethereum bulls, a steady downward trend emerged in 2023. As a result, the ratio dropped to 0.0220 — its lowest level since 2020. Should we expect a rebound from current levels?
There are several key differences between today’s market and that of 2021, when ETH/BTC experienced a major rally. In September 2022, Ethereum transitioned from proof-of-work to proof-of-stake via an update known as The Merge. Meanwhile, the number of altcoins continued to grow at a robust pace, and key ETH competitors like Solana have significantly strengthened. Overall, these factors have negatively affected Ethereum’s relative popularity.
At this point, stronger catalysts are needed for ETH to gain ground against BTC. While the ETH/BTC ratio suggests ETH is oversold, the market still lacks a compelling reason to start aggressively buying it.
Currently, ETH lacks significant positive drivers that could push the ratio higher. The total value locked (TVL) in Ethereum-based protocols has been declining since the start of the year. Global markets are also under pressure due to Trump’s tariffs, which is bearish for riskier assets, including altcoins.
However, things can change quickly in crypto markets. ETH is already trading at historically low levels relative to BTC, and such levels may attract speculative investors. If the right catalysts emerge, ETH could significantly outperform BTC in the next leg of the bull cycle.