Ethereum has reached “one among its deepest undervaluation zones in years," according to analysts at crypto asset manager Bitwise.
A note shared with Decrypt says the second-largest cryptocurrency has been "constantly underperforming" against Bitcoin since late 2022, with ETH/BTC values suffering as a result.
At the time of writing, 1 ETH buys 0.027 BTC—down 47% over the past 12 months, according to CoinGecko data.
But Bitwise Europe's head of research, Andre Dragosch, argues Ethereum "is basically mispriced relative to on-chain exercise and adoption metrics."
Growing interest in artificial intelligence, meme coins and the tokenization of real-world assets have been blamed for ETH's disappointing performance.
"[These] areas profit from decrease transaction prices, leaving Ethereum’s typically congested and costly community at an obstacle," the note says.
Dragosch adds that the rise of Layer 2 scaling solutions "has fragmented exercise throughout a number of ecosystems, limiting the worth straight captured by Etheruem's base layer."
And to make matters worse, ETH's "in depth use as a buying and selling pair throughout the crypto ecosystem has made it vulnerable to persistent downward stress from arbitrage every time its worth rises."
Nonetheless, Bitwise points to historical data that suggests Ether could be "poised for a possible rebound in February," because it's secured optimistic returns in opposition to BTC in seven of the previous eight years.
Bitcoin has risen by 3.72% within the 12 months thus far. In contrast, Ether has plunged by 20% since 2025 started.
And whereas BTC hit a recent all-time excessive above $109,000 final month, ETH is but to surpass a report worth of $4,891.70 set again in November 2021.
The divide widens additional given Bitcoin's presently 11% off its worth peak, with Ether now buying and selling at a 46% low cost.
This too has been mirrored within the efficiency of exchange-traded funds monitoring ETH's worth.
Information from SoSoValue reveals the entire internet property in U.S. Bitcoin ETFs now stand at $115 billion—5.9% of this digital asset's market cap.
The capital locked up in ETH ETFs is a mere $10.15 billion by comparability, which equates to only 3.1%.
Edited by Stacy Elliott.