Ethereum — the second-largest cryptocurrency by market capitalization — is under increased pressure compared to the leading market player Bitcoin. After Ethereum’s historic transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) in September 2022, expectations for a significant strengthening of its position have not materialized.
What Happened After the Ethereum Merge?
On September 15, 2022, Ethereum officially transitioned to PoS through the long-awaited “Merge,” with the goal of improving the network’s scalability, sustainability, and energy efficiency.
At the time of the Merge:
- ETH was trading against BTC at a ratio of 0.074 BTC per 1 ETH
- Ethereum held 17.7% of the crypto market capitalization, while Bitcoin had 37.6%
The Results: 70% Drop of ETH Against BTC
Today, the ETH/BTC ratio has dropped to 0.022 BTC — a decline of over 70%. Instead of closing the gap with Bitcoin’s dominance, Ethereum has fallen even further behind.
- ETH’s market dominance has decreased from 17.7% to just 8%
- BTC’s market dominance has grown to 58.9%, the highest level since early 2021
What’s Behind the Decline?
Despite the improvements introduced through PoS, several key factors have contributed to Ethereum’s loss of position:
- The impact of Bitcoin ETFs — institutional capital has mainly focused on BTC
- Lack of a strong altcoin season — investors haven’t shifted to ETH as in past market cycles
- Increased competition — Layer 1 alternatives like Solana and Sui are taking market share
- Dilution of interest — the rapid growth of new tokens and networks is weakening Ethereum’s position in the DeFi and NFT ecosystems
Is Ethereum Recovery Possible?
Despite its current weakness, Ethereum remains a key player in the crypto ecosystem due to its large-scale infrastructure, developer support, and use in DeFi, NFT, and Web3 applications.
Recovery of the ETH/BTC ratio would require:
- Greater institutional demand for ETH (including ETFs)
- A strong altcoin season
- Improvements in scalability and fees through Layer 2 solutions
Conclusion:
Ethereum has suffered a significant decline against Bitcoin after its transition to PoS, with a 70% drop in the ETH/BTC ratio and a major loss in market share. Nevertheless, ETH remains a technological leader and has the potential to recover under the right market dynamics and regulatory clarity.
This article is for general informational purposes only and is not intended to be, nor should it be considered, legal or investment advice.
