In the world of cryptocurrency, Bitcoin has always been a highly anticipated giant, with its price soaring all the way, setting off a frenzy of investment. However, while Bitcoin is taking off, Ethereum has failed to keep up with this continued rise. What secrets are hidden behind this? Let us uncover the mystery of Ethereum and explore the reasons why it has not kept pace with Bitcoin.

As a smart contract platform, the technology and application potential behind Ethereum cannot be underestimated. However, despite the market's high hopes for Ethereum's potential, its price performance has not been comparable to Bitcoin. This phenomenon has aroused widespread attention and speculation. Next, we will conduct in-depth analysis from multiple perspectives such as technology, market and community to reveal the reasons behind Ethereum's failure to catch up with Bitcoin.

From a technical perspective, Ethereum's expansion problem has always been one of the bottlenecks in its development. Compared with Bitcoin, Ethereum's transaction speed and throughput are not ideal, resulting in congestion during peak trading periods, and even causing network delays and soaring transaction fees. This technical bottleneck directly affects Ethereum's user experience and market competitiveness, making it unable to compete with Bitcoin in terms of price.

In addition, there are certain uncertainties in Ethereum's governance mechanism and technological upgrades, which bring certain risks and concerns to investors and developers. Compared with the fork event of Bitcoin, Ethereum's governance mechanism is relatively complex, and there may be disagreements and uncertainties in the process of technological upgrades, which affects the market's confidence in the long-term development of Ethereum, thereby restricting its price increase space.

At the market level, Ethereum's value discovery mechanism is more complex than Bitcoin. As a smart contract platform, Ethereum's value depends not only on its circulation properties as a digital currency, but also on its technology and ecosystem as a decentralized application platform. However, the market's pricing of Ethereum is often affected by multiple factors, including market heat, technological progress, competitors, etc., which makes Ethereum's price fluctuate greatly and difficult to continue to rise.

In addition, Ethereum's ecosystem is more complex and diverse than Bitcoin, which is both its advantage and disadvantage. A large number of decentralized applications and tokens have emerged on Ethereum, which has injected vitality into the prosperity and development of its ecosystem, but also made the market's perception of Ethereum's overall value vague and complicated. In contrast, Bitcoin's positioning is more single and clear, and its status as a digital gold is more stable, which makes Bitcoin's price performance more stable and sustainable.

Finally, in terms of community and market sentiment, the development of Ethereum is affected by market sentiment and community consensus. Although Ethereum has a large community and developer team, its internal disagreements and disputes occur from time to time, which makes the market full of uncertainty about the future trend of Ethereum. At the same time, as the first blockchain project, Bitcoin's status and influence have been widely recognized in the market, which provides strong support for the continued rise of Bitcoin.

In summary, Ethereum's failure to keep up with the continued rise of Bitcoin is affected by many factors such as technology, market and community, and also reflects the complexity and variability of the cryptocurrency market. In the future, Ethereum needs to further optimize technology, strengthen market positioning and enhance community consensus in order to stand out from the fierce competition and achieve its own long-term development and steady growth. Let us wait and see and witness the future development path of Ethereum.

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Bitcoin’s recent performance has been challenging the entire market to rise above its competition, however, there is still a gap to go so far. For example, while Ethereum, the second largest mainstream cryptocurrency in the market, has been growing, it has not been as high as Bitcoin on the price charts, which ultimately leads to what? Well, it makes Ethereum’s short-term performance continue to weaken.

According to data provider Skew, Ethereum’s price relative to Bitcoin has now fallen to a six-month low.

Back in January 2020, the ETH/
BTC level had fallen to 1.7% on Skew’s chart. Although at the time of writing, the number is 2.6%, which is much higher than the number in January 2020, the performance is still a six-month low.

Despite these setbacks, the greater Ethereum community remains positive about the relative growth of the digital asset.

Ethereum had the upper hand in July when the digital asset was emerging from a period of consolidation. At the time, Ethereum’s DeFi craze led the market to rise more than Bitcoin. However, compared to Bitcoin, Ethereum’s performance continued to decline as the BTC rebound began and the DeFi hype gradually faded.

Since then, the market’s second-largest digital asset has been forging a new path for itself, and since July, Ethereum’s correlation with Bitcoin has been declining. Although it did recover recently, it is still some distance away from the levels seen in the first half of the year.

The decline in correlation provides it with an opportunity to perform independently and even escape the sudden sell-off in the Bitcoin market, which is evident when analyzing the following chart from data provider CoinMetrics.

Going forward, Ethereum’s value may get a chance to rebound on its own when Bitcoin stabilizes. As the development of the Ethereum ecosystem moves forward, the crypto asset will become a major player through its intrinsic value.

2020 has finally set the direction for ETH
2.0, and as it enters a new model, ETH will be burned instead of remitted to transaction validators, which will provide strong support for deflation, thus favoring the asset’s growth approach, Ethereum will be able to enable participants to ensure transaction security, and settlement will increase its value.

Such developments have already separated Ethereum from other cryptocurrencies in the market, and as more such developments arrive, other cryptocurrencies may continue to operate independently, especially if its correlation with Bitcoin does not climb to previously set levels, which is something we should keep an eye on.