According to an analysis by Ecoinometrics, the cryptocurrency Ether (ETH) is currently around 42% below its implied value compared to the price of Bitcoin (BTC).
This significant relative undervaluation highlights broader market realities. It will be difficult for ETH to challenge BTC’s dominance in the short term.
In the chart below, the pink line represents the actual price of ETH, while the blue line shows the theoretical price or “model” derived from Bitcoin’s movements.
What is said in ecoinometrics is based on regression log log Historical price trends (statistical models that estimate long-term relationships between variables) show that Ether lags significantly behind the theoretical price derived from Bitcoin’s movements.
Beyond this quantitative valuation angle, Ecoinometrics notes that Ethereum lacks a strong narrative to match Bitcoin’s structural strength, making it “difficult for Ethereum to challenge Bitcoin’s dominance in the short term.”
The 2020-2021 cycle saw the rise of non-fungible tokens (NFTs) and the explosive growth of Web3 gaming. served as a powerful catalyst to inject capital into the Ethereum ecosystempushing up the price of the native cryptocurrency. However, these trends As CriptoNoticias reports, its traction is decreasing.
Tokenization of real world assets (RWA) is seen as the next big thing in the decentralized finance (DeFi) space, but the space still needs significant momentum and increased institutional adoption to create an impact comparable to that produced by Bitcoin-focused institutional capital.
In this context, the 42% gap means that while Bitcoin continues to attract constant inflows, especially through new investment vehicles; Ether’s liquidity remains highly dependent on the development of new and robust use cases in its ecosystem.
The continued undervaluation of Ether and the absence of a sufficiently strong alternative crypto market narrative have strengthened Bitcoin’s position as the dominant digital asset. Tokenization of assets may be key to the future rise of the Ethereum ecosystem, but for now industry leadership remains firmly rooted in Bitcoin.
It is important to note that this conclusion is due to ecoinometrics, as ether has no universally accepted intrinsic or “fair” value. This analysis provides a quantitative perspective to identify possible price discrepancies between two major digital assets on the market. However, each investor should do their own research before making any capital decisions.
