BTC/ETH Parity and Ethereum Weakness
The BTC/ETH parity is an important indicator that shows the value of Bitcoin relative to Ethereum. In recent months, this parity has favored Bitcoin; that is, Ethereum has shown poorer performance compared to Bitcoin.
So why?
* Impact of spot Bitcoin ETFs: Spot Bitcoin ETFs, approved in January, attracted a large portion of institutional capital directly into Bitcoin. This increased Bitcoin's dominance in the market while putting pressure on altcoins and, consequently, on Ethereum. There was also an expectation for a spot ETF on Ethereum, but those approvals came later.
* Decrease in network activity and competition: Some data on Ethereum's network activity has decreased. Additionally, the rise of other layer 1 blockchains and layer 2 solutions, such as Solana, has partially redistributed interest away from Ethereum and increased competition by offering lower fees and better scalability.
* Differences in institutional accumulation: The narrative of Bitcoin as "digital gold" and the growing concentration of institutional investors in Bitcoin relative to Ethereum have diminished the appeal of ETH in this process.
