“Under Bitcoin's dominance, how can Ethereum break through its bottleneck and embrace a new round of strong rebound in the face of competition from emerging public chains?
Looking back at the entire crypto market in 2024, the performance of Ethereum (⟨t-77⟩) and Bitcoin (⟨t-79⟩) has sparked a lot of discussions. Analysis shows that the current bull market is almost unrelated to Ethereum and is mainly dominated by Bitcoin. By Q1 2025, Bitcoin's market cap share has risen to 58%, reaching a new high since 2021, and its 'digital gold' narrative has been further strengthened amid macroeconomic turmoil.
In ⟨t-91⟩, under the Fed's interest rate cut cycle in 2024, traditional institutions heavily allocate BTC through spot ETFs, with BlackRock's IBIT seeing a net inflow of over $5 billion in a single month, while Ethereum ⟨t-93⟩ saw only $3.2 billion inflow for the entire year of 2024, with a severe imbalance in capital flow.
Comparison between Bitcoin and Ethereum
When Bitcoin first breaks $100,000, ETH is at $4000
When Bitcoin breaks $100,000 for the second time, ETH is at $3900
When Bitcoin breaks $100,000 for the third time, ETH is at $3700
When Bitcoin breaks $100,000 for the fourth time, ETH is at $3400
When Bitcoin breaks $100,000 for the fifth time, ETH is only $3100
While Bitcoin has repeatedly broken the $100,000 mark, Ethereum's price has been gradually declining. Particularly during Trump's tariff event on February 3, 2025, global market panic led to Ethereum's price plummeting from $2900 to $2100, a drop of 25%, while Bitcoin only fell by 10%. This event further highlighted Ethereum's liquidity shortage.
Ethereum faces challenges
Two main issues currently facing Ethereum:
1. Bitcoin's market dominance: Bitcoin's siphoning effect has led to a large influx of capital into BTC, suppressing ETH's liquidity.
2. Competition from other public chains: Emerging public chains like Solana (SOL) and SUI are competing. Solana, with a block time of 400ms and a transfer cost of $0.001, has attracted a large number of meme projects, with its TVL exceeding $30 billion by the end of 2024, surpassing Ethereum Layer 1's $28 billion (DefiLlama). SUI innovates game and social application development through an object model, with on-chain daily active users growing by 400% in six months. This has siphoned off a lot of liquidity, leading early Ethereum users to gradually migrate to other chains.
Ethereum's long-term prospects
Despite facing many challenges, Ethereum continues to develop steadily in terms of technological upgrades. Compared to public chains chasing short-term speculative bubbles, Ethereum maintains long-term market value through continuous smart contract innovation. Against this backdrop, Ethereum's long-term prospects remain promising.
1. Proto-Danksharding implementation, Layer2 performance leap
By the end of 2024, EIP-4844 will be fully deployed, with Blob data blocks reducing Rollup transaction costs to below $0.01, and Arbitrum's daily transaction volume exceeding 5 million (approaching 10% of Visa's level). Coinbase's Base chain, with its seamless fiat entry, attracts over 2 million retail users, feeding back the settlement demand of Ethereum's mainnet.
2. DeFi 3.0 and institutional adoption breakthrough
◦ MakerDAO launches the 'ultimate collateral vault', supporting the minting of DAI with tokenized assets like US Treasuries and gold, with ETH staking ratio rising to 45%;
◦ JPMorgan issues tokenized fund shares based on Polygon zkEVM, with ETH staking volume surging 20% in a single month;
◦ The decentralized AI computing power market Akash migrates to Ethereum's mainnet, with staking ETH to participate in GPU scheduling becoming a new narrative.
Future key signals
1. The critical turning point of the ETH/BTC exchange rate:
Currently, the ETH/BTC exchange rate is close to historical lows. If Ethereum can break through the recent high of $2900, it may trigger a trend reversal.
2. Long-term trends and ecological narratives:
Although Ethereum faces pressure in the short term, its technological innovation and ecological resilience lay the foundation for its long-term growth. With improved Layer2 performance and accelerated institutional adoption, Ethereum is expected to gradually narrow the gap with Bitcoin in the future.
Summary: Although Ethereum's performance in the current bull market is not as good as Bitcoin's, its technological innovation and resilient ecological foundation give it a unique advantage in future growth potential. If Ethereum can effectively break through its current bottleneck, a strong rebound is expected. Let's wait and see.
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