Ethereum Lags Behind Bitcoin by 44% Since Transition to PoS, Says CryptoQuant

The price of Ethereum has significantly “lagged” behind that of digital gold since the activation of The Merge and the full transition to the Proof-of-Stake (PoS) consensus algorithm. This is reported by The Block, citing analysts from CryptoQuant.

“Next week marks two years since the Ethereum network transitioned to Proof-of-Stake — a result of the upgrade known as The Merge. Since then, Ether has lagged behind Bitcoin by 44%,” the specialists observed.

According to them, the trend remains unconvincing even after the July launch of spot Ethereum-ETF. The ETH/BTC rate at 0.0425 is the lowest since April 2021.

Experts added that since the transition to PoS, Ether has also lagged behind other assets like Solana and BNB by 53% and 18%, respectively. Moreover, the “slippage” in ETH’s price may continue further.

“In our estimation, the price of Ether expressed in Bitcoin could fall to approximately 0.02, a 50% drop,” the analysts noted.

Why is Ethereum Falling?

As the primary reason for the negative trend, CryptoQuant specialists pointed to low on-chain activity, even compared to Bitcoin. One sign of stagnation is the decline in the total volume of transaction fees, partly due to the Dencun upgrade. This upgrade contributed to a reduction in the rate of ETH burning and, consequently, an increase in inflation.

“The total supply of Ether has been steadily increasing since early April, shortly after Dencun. The figure now stands at 120,323 ETH, the highest since May 2023,” Glassnode emphasized.

According to analysts, investors and traders are showing a preference for Bitcoin over Ether. This is reflected in corresponding changes in spot trading volumes.

Earlier, representatives from QCP Capital noted Ethereum’s significant lag behind the leading cryptocurrency in August. They also warned of a potential continuation of market correction in September.