The 2023-24 cryptocurrency cycle has seen an unusual trend in the ETH/BTC ratio, which is a significant indicator of market risk appetite and capital rotation.
Despite the start of a bull market towards the end of 2022, the ratio has continued to decline unexpectedly. Experts believe that two main factors are contributing to this underperformance.

Firstly, the approval of spot Bitcoin ETFs in the US in January 2024 has significantly increased buying pressure for Bitcoin, the leading cryptocurrency. Secondly, the fierce competition among Proof-of-Stake (PoS) blockchains has posed a challenge to Ethereum’s dominance in various aspects such as liquidity, capital attraction, user experience, and scalability.
Traditionally, Bitcoin leads the market during bear markets and early bull markets but lags in the later speculative phases. The ETH/BTC ratio is an essential tool for analysts to gauge capital rotation, with Ethereum acting as a barometer for general risk appetite. However, the current cycle has seen a deviation from these norms.
Experts anticipate a shift in this landscape with the potential introduction of spot Ether ETFs in the US, which could reverse the current downtrend.
Investors are eagerly awaiting the launch of Ethereum ETFs, with several major asset managers submitting their revised spot ETH ETF registration statements to the SEC. The deadline for the submissions is set for July 8, and experts are hopeful that the drafts could be approved within the next two weeks.
While the SEC has approved issuers’ spot ETH ETF applications, they still need to greenlight their S-1s before trading can commence.
In terms of on-chain metrics, Ethereum has managed to maintain its position above $3,000 despite market fluctuations. The Ethereum Realized Cap currently stands at $240 billion, indicating a potential bottom for the altcoin. The Market Value to Realized Value (MVRV) ratio is showing signs of profitability improvement, with the average Ethereum investor holding unrealized profits.
Overall, the cryptocurrency market is experiencing significant developments, and the introduction of Ethereum ETFs could potentially reshape the current landscape. Investors are advised to stay informed and monitor market trends closely for potential investment opportunities.