- Ethereum has lost 70% of its value against Bitcoin since transitioning to proof-of-stake in September 2022.
- ETH’s market dominance has plummeted from 17.7% to 8%, while BTC’s increased from 37.6% to 58.9% during the same period.
- Both cryptocurrencies have experienced a similar 21% decline in active addresses, but ETH’s trading volume relative to BTC has dropped from 73% to 59%.
Ethereum’s much-celebrated transition to proof-of-stake (PoS) has coincided with a dramatic underperformance against Bitcoin over the past two and a half years. Since “The Merge” on September 15, 2022, ETH has declined 70% against BTC, marking what has proven to be one of the best opportunities to have exchanged ETH for BTC.
The transition from work-based security to a financialized security model was widely promoted as a transformative event that would address Ethereum’s energy consumption concerns. Supporters particularly emphasized the changes in ETH issuance, positioning the cryptocurrency as deflationary “ultrasound money.” However, market performance tells a significantly different story.
When Ethereum celebrated its PoS transition, one ETH cost 0.074 BTC. Today, that same ETH costs merely 0.022 BTC—a 70% reduction in relative value. This price action represents a four-year low in the ETH/BTC trading pair.
This decline extends beyond just price. Ethereum’s market cap dominance has seen a precipitous fall from 17.7% of the total cryptocurrency market on Merge day to just 8% currently. Over the same period, Bitcoin‘s dominance has surged from 37.6% to 58.9%.
The so-called “flippening”—the hypothetical moment when Ethereum’s market capitalization would surpass Bitcoin’s—has become an increasingly distant prospect. On Merge day, ETH was 44.4% of the way to flipping BTC, requiring just a 2.3X rally to achieve this milestone according to metrics from Ultrasound Money. Today, that flippening ratio has collapsed to 13.8%, and ETH would now need to rally 7.3X to overtake Bitcoin’s market cap.
User activity metrics offer no consolation. On September 15, 2022, Bitcoin had 841,579 active addresses, which has since decreased by 21% to 665,063. Ethereum has followed a similar trajectory, with active addresses declining from 619,189 to 486,636—also a 21% reduction—suggesting neither network has outperformed the other in maintaining user engagement.
Trading volume comparison provides another indicator of Ethereum’s relative decline. During The Merge, ETH’s $25 billion in daily volume represented a substantial 73% of Bitcoin’s $34 billion. This ratio has since deteriorated to 59%, with current volumes at $19 billion for ETH versus $32 billion for BTC.
These metrics collectively paint a picture of Ethereum struggling to maintain its position in Bitcoin’s shadow since abandoning its original proof-of-work consensus mechanism. Despite the environmental benefits and technical advancements of the proof-of-stake transition, market participants have clearly shown a preference for Bitcoin’s unchanged proof-of-work security model over this period.
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