According to a report by Kaiko Research, Ethereum's performance has lagged behind Bitcoin since the Fed's 50 basis point rate cut in September.
Bitcoin's price rose 14% to hit $69,500 early Monday, while Ethereum saw a more modest 12% increase over the same period.
The Fed’s September 18 rate cut spurred strong inflows into Bitcoin ETFs and supported risk sentiment, driving Bitcoin’s rally. Ethereum, despite benefiting from the same macroeconomic tailwinds, continued to underperform, as highlighted in a Kaiko Research report published on Monday.
The report also noted a significant decline in the ETH/BTC ratio, which fell below 0.04 in October, its lowest level since April 2021. According to Kaiko analysts, this decline underscores Ethereum’s slower institutional adoption rate compared to Bitcoin.
Kaiko Research attributes Bitcoin’s stronger performance to its first-mover advantage and appeal among institutional investors. The report noted that open interest in Bitcoin CME futures has recently reached record levels, while Ethereum futures contracts on CME remain relatively low, currently holding 7,300 contracts with a notional value of $970 million.
Kaiko analysts also noted weak demand for Ethereum in spot markets. Ethereum underperformed most altcoins in terms of trading volume in October. The volume gap between Ethereum and the top 50 altcoins has reached its widest level since March, reflecting Ethereum’s struggle to keep up with Bitcoin and other cryptocurrencies in the market.
The report suggests that while Ethereum has benefited from more positive market sentiment, slower institutional adoption and lackluster spot market demand have hindered its performance relative to Bitcoin.
*This is not investment advice.