Ethereum vs Bitcoin: Undervalued But Risky

Bitcoin Correlations Report, September 2024

The Bitcoin vs Ethereum correlation remains one of the strongest in crypto. Nine years on, it's still going strong. But lately, Ethereum has been lagging behind Bitcoin in performance.

Why is this happening? Is it a good time to buy Ethereum? Here's my take.

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Ethereum vs Bitcoin: Undervalued But Risky

The Takeaway

Ethereum is significantly undervalued relative to Bitcoin, trading 2.5 standard deviations below its expected price. However, this apparent opportunity comes with caveats. We are close to a bear market regime where Bitcoin typically outperforms Ethereum, and their strong correlation suggests Ethereum may follow Bitcoin's downward trend.

Fundamentally, Ethereum faces challenges. DeFi activity has plateaued, NFTs are declining, and blockchain gaming never took off. While Ethereum looks cheap, its lack of growth in key areas is concerning. Investors should weigh these factors carefully before increasing their Ethereum positions in the current market.

Ethereum Is Significantly Undervalued Relative To Bitcoin