Ethereum Falls to Lowest BTC Ratio Since 2020 — Is a Deeper Slide Ahead?
The ETH/BTC ratio has dipped below 0.022, marking its lowest point since December 2020 and raising concerns over Ethereum’s competitiveness in the Layer 1 (L1) arena as rivals like Solana gain market share.
Ethereum Faces Pressure as ETH/BTC Ratio Hits Four-Year Low
Ethereum, the world’s second-largest cryptocurrency by market cap, continues to lose ground against Bitcoin. The ETH/BTC ratio has now declined to 0.022—down more than 73% from its 0.085 level in September 2022.
Currently trading near $1,880, ETH is down 9% over the past week and over 62% from its all-time high of $4,890. While Bitcoin is only down 10% in 2025, Ethereum has fallen by 46%, highlighting a widening performance gap.
This shift reflects Ethereum’s declining dominance in the smart contract and L1 sectors, as blockchains like Solana, BNB Chain, and Avalanche attract more user activity and developer interest.
Ethereum On-Chain Metrics Show Signs of Weakness
As of April 1, Ethereum’s total value locked (TVL) stands at $50.5 billion—just 52.5% of the DeFi market, down from 61.6% in February 2024. In contrast, Solana’s TVL surged 2.5x to $6.69 billion, increasing its market share to 7.24%.
While Ethereum continues to support passive DeFi use cases like staking, Solana is capturing active retail engagement, especially through meme coins and high-frequency trading.
Even as Ethereum gas fees dropped to just 1.12 GWEI in March 2025, the network is still less efficient for microtransactions when compared to newer blockchains.
Investor sentiment reflects this shift. ETH ETF net flows fell 9.8% in March to $2.43 billion, while Bitcoin ETFs have attracted over $36 billion in capital. Short positions on Ethereum have surged by over 500% since November 2024.
Ethereum’s market dominance has now dropped below 8.4%, its lowest level in more than four years—suggesting a shift in capital toward alternative L1s like Solana.
Scalability Remains a Bottleneck as L2s Take Center Stage
Despite the transition to proof-of-stake, Ethereum’s base layer remains limited, handling just 10–62 transactions per second. Meanwhile, Solana processes over 4,300 TPS.
Ethereum’s heavy reliance on Layer 2 solutions like Arbitrum, Optimism, and Base has eased congestion, but it’s diverted user activity and fee revenue from the mainnet.
According to Standard Chartered, Coinbase’s Base alone has pulled $50 billion in value off Ethereum’s base layer. This has hurt ETH’s deflationary appeal, with ETH issuance now becoming net inflationary at a 0.5% annualized rate.
Staking rewards have dropped below 2.5%, trailing DeFi stablecoin yields which offer over 4.5%. Upcoming upgrades like Pectra may improve L2 efficiency, but analysts say it’s unlikely to significantly reverse ETH’s BTC underperformance.
Organic usage on the Ethereum base layer is thinning. Bots dominate gas activity, and user deployments have slowed—a trend some have described as the “graveyard effect.”
Ethereum Outlook: Are We Near the Bottom?
Analysts remain divided. Bloomberg’s Mike McGlone sees Ethereum tracking broader tech markets, warning a major stock downturn could drag ETH to $1,000.
Others, like Michaël van de Poppe, remain cautiously optimistic. He notes that reclaiming the $2,100–$2,150 range could spark a breakout toward $2,800, especially if the U.S. Dollar Index continues to weaken.
For now, the path ahead is unclear. Ethereum must recover key price levels and regain user momentum—or risk falling further behind its fast-moving rivals.
