What Will It Take for Ethereum to Outperform Bitcoin? Bitget’s Chief Analyst Explains

The ETH/BTC ratio, a key measure of Ethereum’s (ETH) strength against Bitcoin (BTC), has stayed below 0.05 for more than a year, highlighting Ethereum’s struggle to gain ground against the largest cryptocurrency even during what many analysts described as an ‘Ethereum season.’

According to Bitget’s Chief Analyst, Ryan Lee, Bitcoin’s role as the market’s ‘anchor asset’ explains why Ethereum continues to lag. He also shared with BeInCrypto what conditions would be needed for ETH to close the gap finally.

Why the ETH/BTC Ratio Remains Depressed After a Year 

It is worth noting that the ETH/BTC ratio serves as a barometer for investor sentiment. When the ratio rises, it suggests that investors are favoring Ethereum over Bitcoin, often due to strong demand from developments such as staking, DeFi activity, or broader optimism in altcoins. 

Conversely, when the ratio falls, it indicates Bitcoin is outperforming. This may reflect risk-off sentiment, where investors prefer the relative safety of Bitcoin or expect stronger returns from it.

In April, the metric fell to a 5-year low amid ETH’s price struggles. However, what came after was a notable recovery. The ratio even went as high as 0.043 on August 24, coinciding with ETH’s all-time high (ATH). 

Still, despite record ETH performance, the ratio could not cross the 0.05 threshold, a level last seen in August 2024. At the time of writing, the metric had fallen slightly to 0.038.

ETH/BTC Ratio. Source: TradingView

But what’s behind the lag? Bitget’s Chief Analyst Ryan Lee observed that although over $4 billion poured into Ethereum exchange-traded funds (ETFs) in August, the asset’s relative underperformance emphasizes Bitcoin’s greater appeal to cautious investors amid an uncertain macro environment. 

This reinforces Bitcoin’s status as the industry’s ‘anchor asset.’ Meanwhile, Ethereum’s long-term potential is tied to the expanding adoption of its DeFi and tokenization ecosystem.

“The ETH/BTC ratio remaining below 0.05 for over a year, even as Ethereum hits record highs and attracts billions in ETF inflows, underscores Bitcoin’s enduring position as crypto’s ultimate store of value,” Lee told BeInCrypto.

The analyst explained that Ethereum’s chances of narrowing the valuation gap may depend on quarterly ETF inflows exceeding $9 billion, the smooth implementation of upcoming network upgrades, and substantial growth in tokenized assets and DeFi volumes.

“Such catalysts would give ETH a platform to outperform BTC, complementing Bitcoin’s store-of-value narrative with utility-driven demand,” he added.

Lee added that broader macro conditions will be crucial in shaping the market outlook. Today, a highly expected 25-basis-point rate cut from the Federal Reserve would lower borrowing costs and inject liquidity, creating a supportive environment for risk assets. 

In such a scenario, Bitcoin could move toward the $150,000–$200,000 range by year-end, while Ethereum might rise to $5,800–$8,000, driven by ETF inflows and continued network expansion. 

“Together, these trends reflect a maturing market where Bitcoin and Ethereum drive industry growth in tandem, provided inflation stays contained and no major geopolitical shocks disrupt sentiment,” Lee mentioned to BeInCrypto.

ETH/BTC Ratio at a Crossroads: Altcoin Season Ahead or Bearish Breakdown? 

Meanwhile, some analysts anticipate an imminent rise in the ratio. In a post on X (formerly Twitter), an analyst pointed out that after a 150% surge, the ETH/BTC ratio has been trading sideways.

ETH/BTC Ratio Forecast. Source: X/Zynweb3

He suggested the rally is still intact. Yet, the analyst anticipates Bitcoin will take the lead for a while before Ethereum picks up again, with the next leg higher likely beginning around late October or early November.

Another analyst drew parallels to the 2021 cycle, when similar ETH/BTC formations heralded an altcoin season.

However, not all views are bullish. Analyst Colin Talks Crypto warned of a forming head-and-shoulders pattern, a setup typically seen as bearish. If confirmed, this could point to weakening momentum and the possibility of a trend reversal, signaling that Ethereum may lose ground against Bitcoin in the near term.

Head-and-Shoulders Pattern on ETH/BTC Chart. Source: X/ColinTCrypto

Thus, the ETH/BTC ratio remains at a crossroads. While ETF inflows, DeFi growth, and macro liquidity could provide Ethereum the momentum to challenge Bitcoin’s dominance, chart patterns and investor caution suggest risks remain. For now, the ratio reflects a market still weighing whether Ethereum’s utility can overcome Bitcoin’s anchor role as the crypto industry’s store of value.