Ether is losing heavily to Bitcoin and Solana this cycle

The second-largest crypto, Ethereum remains in a tough spot in the latest market cycle. ETH price continues to underperform significantly compared to other large-cap cryptos like Bitcoin and Solana. This underperformance is despite the recent launch of spot exchange-traded funds.

Spot Ether ETFs began trading in the US markets on July 23rd. So far, more than $329.80 million volume has been traded with $7.06 billion in net assets as of August 7, according to SosoValue. However, ETH’s price has tumbled over 28% since its debut.

Meanwhile, BTC is up over 21% since its spot ETFs launched on January 10. As of August 7, Bitcoin ETFs had about $2.20 billion in total traded volume. 

SOL, BTC are up 41% and 25% against ETH this year

The argument for Ether may be that the ETFs were launched during a lull in the crypto market as prices were retracting from March’s high. The stalling prices around the ETH ETF launch sharply contrast with Bitcoin ETFs, which launched during the heat of this cycle.

Historical price data also shows ETH has performed the worst against BTC and SOL since September 2023. Just off the market crash on August 5, SOL hit a record-high of $0.06419 early today against ETH. The fourth-largest crypto has gained over 41% against ETH since the start of 2024 and 528.7% since September 2023. 

Ether is at a three-year low against Bitcoin. At the time of writing, the ETH/BTC pair was trading at $0.04272, a level not seen since April 2021. BTC has been up 25% against ETH so far this year and 48.5% since September 2023.

Speculations surround Ether’s underperformance

The reasons ETH is lagging this cycle can only be speculated. Some people blame the fragmentation of layer-two protocols on Ethereum, which affects the overall liquidity of the chain. Others point to data that Solana has been taking a good share of volume off Ethereum.

Data from DeFiLlama shows Solana surpassed Ethereum in monthly DEX trading volume in July, reaching $55.876 billion, while Ethereum posted $53.868 billion. The momentum on Solana is mostly driven by the memecoin frenzy, which also saw the Solana-native memecoin platform Pump.fun outperform Ethereum in 24-hour revenue on July 29.

Jump Trading, one of the largest crypto market makers, has also been offloading its Ether positions around the same period, which has only now gotten many worried. 

Lookonchain reported that Jump sold 120,695 wstETH worth $481 million on August 5, which coincided with the overall market dip. Before then, Jump had already sold another 83K wstETH for $377 million since July 24, which preceded a 33% drop in ETH price. 

Jump moved another 11,501 ETH, worth $29.11 million, from Lido for sale and applied to redeem an additional 19,049 ETH, worth $48.22 million, at the time. The market maker is currently at its lowest on ETH. 

It’s uncertain if Jump Trading is unwinding its ETH holdings due to market uncertainties. However, reports note that the company is being investigated by the U.S. Commodity Futures Trading Commission.