How much lower can the price of ETH fall in comparison to Bitcoin during the DeFi spread?
In spite of the NFT craze, Ether (ETH) has not been able to reclaim its highest value against Bitcoin (BTC) since the year 2017. On the contrary, Ethereum has reduced by 35 per cent in comparison to BTC since the end of 2021. There is a possibility of further decline in the upcoming months.
The Relationship Between BTC And ETH
Whenever the pair BTC and ETH experiences a bullish trend, it means crypto traders will gain a riskier appetite. Investors need to make one of two decisions: valuating the future of Ether’s price or storing their investment in BTC in the long run.
On the other hand, when this pair goes through a bearish phase, the market of share of both ETH and altcoins decline. Due to this, most traders and investors stick with Bitcoin, unwilling to take risks during adverse market conditions.
During the pandemic, the popularity of ETH Blockchain skyrocketed. This is because many developers were attracted to its DeFi (Decentralized Finance) projects. This included lending platforms and exchange between peers.
BTC Is Better Off Than ETH, But Still Struggling
In the current bear wave, BTC is experiencing less severe downsides in comparison to ETH. The price of Bitcoin as fallen to $21,500 (dropping by 70 per cent) since the end of 2021. In comparison, ETH fell by 75 per cent in the same time frame.
BTC also has inflows from investment funds, amounting to $480 million a year (till this day). This is why the BTC price drop has little impact on its demand, especially between institutional investors.