Ethereum’s Market Cap Share Relative to Bitcoin Hits 3.5-Year Low

The market capitalization ratio of Ethereum to Bitcoin has fallen to 24.52%, the lowest level since April 2021. At the beginning of 2024, the metric stood at 32.7%, reports The Block.

This indicator reflects investor preferences and capital flows between the two largest assets by market value in the cryptocurrency market.

The growing dominance of digital gold is evidenced by the demand for ETFs.

According to SoSoValue, cumulative inflows into Bitcoin-based products have reached $23.5 billion, while those for Ethereum counterparts remain negative (-$554.7 million).

The Block suggests that the positioning of the first cryptocurrency as “digital gold” aligns more closely with traditional investment frameworks, making the asset more “understandable” for institutions. This contrasts with Ethereum and its role in DeFi.

“While the technological capabilities and ecosystem of Ethereum are more diverse, this complexity can hinder its perception in TradFi, which prefers clearly defined strategies,” the publication explained.

Journalists speculated that successful adoption of Bitcoin by traditional financial institutions could eventually lead to increased interest in investing in the second-largest cryptocurrency by market capitalization.

Earlier, the Michigan state pension fund disclosed the acquisition of 460,000 shares of Grayscale Ethereum Trust (ETHE) worth over $10 million and 460,000 shares of Grayscale Ethereum Mini Trust ETF (ETH) worth approximately $1.1 million.