On September 15, 2022, the Ethereum blockchain underwent a major overhaul, transitioning from its original Proof-of-Work (PoW) consensus mechanism to Proof-of-Stake (PoS). This significant event, widely known as “The Merge,” was heralded as the dawn of a new era for Ethereum (ETH). Key expectations included drastically reduced energy consumption and the transformation of ETH into a deflationary asset, often referred to as “ultrasound money.” However, the performance of the leading altcoin since this transition, particularly when measured against Bitcoin (BTC), has been notably underwhelming.
ETH/BTC Ratio Performance Post-Merge
At the time Ethereum shifted to PoS, the value of ETH relative to BTC stood at approximately 0.074 BTC per ETH. Since then, this ratio has experienced a sharp decline. Currently, it hovers around 0.022 BTC per ETH, marking a dramatic fall of roughly 70% in value against Bitcoin. This represents a significant performance lag, especially considering the optimism surrounding Ethereum’s updated consensus model.
Shift in Market Dominance
Ethereum’s share of the overall cryptocurrency market capitalization has also been negatively impacted. During The Merge, ETH accounted for 17.7% of the total crypto market cap, while Bitcoin held a dominant share of 37.6%. In the time since, Ethereum’s market prominence has contracted significantly, falling to just 8%. Conversely, Bitcoin’s market dominance has expanded, now reaching approximately 58.9%.
The Elusive ‘Flippening’
The much-discussed “flippening” scenario – the hypothetical event where Ethereum’s market capitalization surpasses Bitcoin’s – appears increasingly distant. At the point of The Merge, Ethereum’s market cap was closer to Bitcoin’s than it is now. Today, however, the gap has widened considerably. ETH’s market cap is now only about 13.8% of BTC’s, implying that Ethereum would require a substantial 7.3-fold rally (relative to Bitcoin’s performance) to overtake the leading digital asset.
This data indicates a clear trend where Bitcoin has significantly outperformed Ethereum in the period following the implementation of Proof-of-Stake on the Ethereum network.
Jason Walker, aka “Crypto Maverick,” is the energetic new member of cryptovista360.com. With a background in digital finance and a passion for blockchain, he makes complex crypto topics engaging and accessible. His mix of analysis and humor simplifies volatile market trends. Outside work, Jason explores tech, enjoys spontaneous road trips, and American cuisine. Crypto Maverick is ready to guide you through the ever-changing crypto landscape with insight and a smile.