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Ethereum, the second-largest crypto, is losing ground to its competitors Bitcoin and Solana in the latest market cycle. ETH has dropped more than 28% since the launch of spot ETFs, while BTC and SOL have posted significant gains.
Ether pales in comparison to the rise of Bitcoin and Solana
Despite the recent launch of Spot Ether ETFs on July 23, the price of ETH has only declined. More than $329.8 million in volume has been traded on these new products, for $7.06 billion in net assets as of August 7. But this was not enough to support the price of the second-largest crypto.
In comparison, Bitcoin has gained more than 21% since the launch of its own Spot ETFs on January 10. As of August 7, the Bitcoin ETFs were generating a total trading volume of about $2.2 billion.
Over the year 2024, the gap has widened further. Solana and Bitcoin have respectively gained 41% and 25% against Ether. In other words, the price of ETH has dropped significantly more than that of BTC and SOL since the beginning of the year.
Factors weighing on Ether’s performance
Several elements seem to explain this underperformance of Ether. Some point to the fragmentation of Ethereum’s layer 2 protocols, which would affect its overall liquidity.
Others highlight the rise of Solana, fueled by the memecoins frenzy on its network. According to DeFiLlama data, Solana surpassed Ethereum in monthly DeFi transaction volume in July, with $55.876 billion compared to $53.868 billion for Ethereum.
Furthermore, the crypto trading giant Jump Trading has massively sold its Ether positions in recent weeks, which has sparked concern in the market. The company is also under investigation by the CFTC in the United States.
In light of the decline of Ether compared to its major competitors, investors will closely follow the upcoming developments of the second-largest crypto. Ethereum will need to overcome challenges to regain market confidence and recover lost ground against increasingly threatening challengers.
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Passionné par le Bitcoin, j’aime explorer les méandres de la blockchain et des cryptos et je partage mes découvertes avec la communauté. Mon rêve est de vivre dans un monde où la vie privée et la liberté financière sont garanties pour tous, et je crois fermement que Bitcoin est l’outil qui peut rendre cela possible.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
