Ethereum’s value against bitcoin has dropped to its lowest level in a month, now testing support at 0.035 bitcoins.
That’s after it reached a high of 0.046 on Feb the fifth, meaning it has dropped by 25% in just over a week.
That coincides with Tesla’s announcement of buying bitcoin, propelling digital gold to new highs while eth hasn’t quite kept up.
Ethereum’s price against bitcoin is now back to August/September levels where there appears to be some reasonable support.
If it will be held remains to be seen, but bitcoin currently has a lot going for it, with it very much leading.
Yet it isn’t clear for how long, because the two tend to ping pong all the time, with bitcoin having won so far.
Sooner or later it will presumably pass it to eth, which has the biggest adoption and infrastructure after bitcoin.
Just recently American singer Gene Simmons announced to his one million followers he bought $300,000 worth of eth.
Ethereum in addition is waiting for the rollout of the fee market EIP-1559 proposal, something that would address capacity to some extent in a few ways.
Firstly, it will reduce the incentive of miners to spam the blockchain, which they do and heavily, presumably to increase the fees.
Secondly, it will double the gas limit, so increasing capacity by about 2x to bring it in line with bitcoin’s current capacity.
Then the predictable nature of fees should allow for a far more efficient utilization especially through second layers.
It also has the benefit of burning these fees because there is no other way of implementing it in a decentralized manner, so reducing supply.
Just as exciting may be the beginning of ‘optimistic’ scaling in some dapps, like Synthetix with is moving towards such second layer scaling.
The circulating supply also continues to decrease in eth as the locked staking amount surpasses ◊3 million, with the crypto also waiting for the merger which would reduce new supply by 80%.
So there’s plenty going for it, but it’s bitcoin’s show right now, hence the ratio hasn’t kept up. Until the next game presumably, which no one knows when is to start.