The recent dynamics in the cryptocurrency market have shown Ethereum (ETH) facing challenges as its price lags behind Bitcoin (BTC) and Solana (SOL). On December 20, the Ethereum to Bitcoin price ratio fell below 0.05 BTC, its lowest since April 2021. This decline contrasts with the peak ratio of 0.087 BTC during the last bull market in September 2021. As of early 2023, this ratio was around 0.072 but has since decreased further.
Critics attribute Ethereum's struggle to its relatively high transaction fees, which averaged around $11 on December 19. In comparison, Bitcoin's fees were approximately $32, while Solana maintained fees under $0.01. This disparity has made competing chains like Solana more attractive to users seeking lower transaction costs.
Ethereum's co-creator Vitalik Buterin also acknowledged the platform's challenges, stating that Ethereum would "ultimately fail" unless transaction fees are reduced, especially during bull markets.
In contrast, Solana has been performing well against other cryptocurrencies, including Ethereum. Over the last three months, SOL's price has seen a notable increase, rising 12% to $83 in the last 24 hours.
Despite these challenges, Ethereum continues to lead in terms of total value locked (TVL) on its network, with $28 billion, compared to Solana's fifth position with $1.15 billion. Ethereum's market cap to TVL ratio stands at 9.4, in contrast to Solana's 30.45, a metric used to measure a blockchain’s intrinsic value.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.