Ether-Bitcoin Ratio Hits Multi-Year Lows Indicating Undervalued ETH
The ETH-BTC ratio is currently at historically low levels, signaling potential ETH outperformance. Key points include:
- The ETH/BTC market value to realized value (MVRV) ratio has fallen to multi-year lows.
- The ETH/BTC ratio is at 0.019, down over 75% from late 2021's peak of 0.08.
- MVRV measures the market cap against realized capitalization, indicating average cost basis.
- Network activity remains flat, with no significant growth in transaction counts or active addresses since 2021.
- The Dencun upgrade in March 2024 reduced transaction fees, leading to a decline in fees burned and an increase in total supply.
- Layer 2 solutions like Arbitrum and Base are detracting from mainnet activity, impacting ETH's value narrative.
- Institutional demand for ETH is declining, evidenced by falling staked ETH and lower balances in investment products.
- The total staked ETH dropped from 35.02 million to about 34.4 million since November 2024.
- Investment product ETH balances decreased by approximately 400,000 ETH since early February.
- In contrast, BTC has risen close to $100,000, gaining traction as a safe-haven asset.