Ether keeps lagging bitcoin as the ETH/BTC ratio grinds lower
Ether has hovered near $1,880 while bitcoin holds its range, extending an underperformance that has now run for most of the year.
NEW YORK —
Ether traded near $1,880 this week, leaving the ratio between ether and bitcoin close to its lowest level in several years. The underperformance is now long enough that it has stopped being read as noise and started shaping how funds size their books.
Three explanations dominate. The first is supply: staking withdrawals and continued issuance have added sellable ether at a moment when demand is soft. The second is fee revenue, which has fallen sharply as activity migrated to layer-2 networks that pay only a fraction of what mainnet transactions once did. The third is simply substitution — investors who want beta to the sector have found it in bitcoin exchange-traded products with lower tracking friction.
Defenders of the asset argue the market is pricing the transition badly. Layer-2 activity still settles to Ethereum, and the networks pay for the privilege; the payment is just smaller and less visible than the fees it replaced. Whether that revenue base grows fast enough to matter is the open question.
Options markets show little appetite for a resolution soon. Implied volatility on ether sits only modestly above bitcoin's, unusual for an asset that has historically traded with a meaningful risk premium. That flatness suggests traders expect the drift to continue rather than break.