When Bitcoin surged to new all-time highs driven by U.S. ETF approvals, Ethereum lagged noticeably behind.
Historically, the ETH/BTC exchange rate hovered around 0.05—a key psychological threshold. But since last year, this balance has shattered. While Bitcoin soared to $110,000, Ethereum struggled, dragging the ratio down to 0.02.
Amid this downturn, Ethereum’s founder Vitalik Buterin sparked backlash for posting videos of robot cats instead of addressing concerns. Yet, the real issue isn’t his whimsy—it’s Ethereum’s structural challenges against Bitcoin’s "profit-purging" supremacy.
The Core Issue: Early Profit-Takers Dictate Long-Term Performance
Bitcoin’s genius lies in its natural purification mechanism:
- Lost coins: 14–19% of BTC’s supply (4M+ coins) are permanently inaccessible due to lost keys or hardware failures.
- Hodler shift: Early Chinese-mined BTC migrated to long-term Western holders after regulatory shakeouts.
- No pre-mine: Unlike ETH, Bitcoin had no founder/team allocations or zero-cost initial distributions.
Ethereum faces chronic sell pressure from:
- Genesis ETH: 72M ETH allocated to foundations/early investors (virtually zero cost).
- ICO dumpers: Projects sold 500K+ ETH/month during 2016’s ICO boom.
- DeFi cashouts: Uniswap airdrop recipients once dumped $300M ETH daily.
- PoS inflation: 1,800 new ETH minted daily (~0.3% annual inflation)—zero-cost supply added to existing sell pressure.
👉 Why Bitcoin’s scarcity model outperforms
Case Studies: The Survival of the "Purged"
- Dogecoin/Litecoin: Thrive despite weak fundamentals because early profit-takers fully exited.
- EOS/BCH: Failed due to concentrated team holdings and ongoing miner/developer sell-offs.
- Solana risks: VC unlocks in 2–3 years may replicate Ethereum’s current struggles.
Key Investor Takeaways:
- Price = circulating supply demand, not total market cap.
- "Profit-purging" completeness determines longevity. Bitcoin’s 14-year purification dwarfs Ethereum’s ongoing涅槃.
FAQs
Q: Will Ethereum recover against Bitcoin?
A: Likely not until major early holders fully exit. The 0.02 ETH/BTC ratio may drop further.
Q: Why does Bitcoin’s "dead coin" effect matter?
A: Lost coins reduce sell pressure artificially, creating scarcity beyond programmed supply.
Q: Is PoS making Ethereum’s inflation worse?
A: Yes—validators earn 0.3% annualized ETH with zero hardware costs, adding sell pressure without natural purges like Bitcoin’s矿工.
Conclusion: Opportunity in the Dip?
While ETH’s短-term outlook seems bleak, its long-game hinges on emulating Bitcoin’s profit-purging journey. For investors, the real play begins when the last early adopter cashes out.