Published: 12 April 2025 at 03:36 PM By Pahan T
Introduction
Ethereum (ETH), once hailed as the “Bitcoin killer,” Now Ethereum Price Crash 77% against Bitcoin (BTC) since December 2021, according to Santiment’s on-chain data. While ETH’s USD value hasn’t collapsed entirely, its long-term underperformance against BTC raises serious concerns.
This deep dive examines the key reasons behind Ethereum’s decline, including:
- Layer 2 solutions cannibalizing Ethereum’s mainnet activity
- High gas fees driving users to competitors
- Regulatory uncertainty and security concerns
- Lack of a clear investment narrative compared to Bitcoin
- Rising selling pressure from staking withdrawals
Let’s explore the data behind this Ethereum price crash and what it means for investors.
Ethereum Price Crash Against Bitcoin
ETH/BTC Price Ratio: A 77% Collapse
Since peaking in December 2021 Ethereum Price Crash 77% of its value against Bitcoin. The ETH/BTC ratio, a critical metric for altcoin performance, paints a grim picture:
| Period | ETH/BTC Ratio | Change |
|---|---|---|
| Dec 2021 (Peak) | 0.085 | – |
| April 2025 | 0.019 | -77% |
Source: Santiment, TradingView
Meanwhile, Bitcoin has reclaimed dominance, nearing its all-time highs, while ETH struggles below $2,500—far from its $4,760 peak.
Why Is Ethereum Underperforming?
Santiment’s report highlights five major factors behind Ethereum’s decline:
- Layer 2 Solutions Are Killing Mainnet Demand
- Chains like Arbitrum, Optimism, and zkSync reduce Ethereum’s mainnet usage.
- Users prefer cheaper L2s, reducing ETH’s transaction fee revenue.
- High Fees & Slow Upgrades Drive Users Away
- Ethereum’s gas fees remain high despite EIP-4844 (Proto-Danksharding).
- Competitors like Solana and Cardano offer faster, cheaper alternatives.
- Regulatory Uncertainty: Is ETH a Security?
- The SEC’s stance on Ethereum remains unclear, unlike Bitcoin’s commodity status.
- Potential security classification could deter institutional investment.
- No Clear Investment Narrative
- Bitcoin = digital gold. Ethereum = unclear.
- Competitors (Solana, Avalanche) offer better scalability narratives.
- Staking Withdrawals Increase Selling Pressure
- Post-Shanghai upgrade, unstaked ETH floods the market, suppressing price.
On-Chain Data Reveals the Damage
1. Declining Network Activity
| Metric | 2021 Peak | April 2025 | Change |
|---|---|---|---|
| Daily Active Addresses | 1.2M | 450K | -62.5% |
| Avg. Transaction Fee | $50 | $8 | -84% |
| DeFi TVL (ETH) | $110B | $35B | -68% |
Source: Santiment, DeFi Llama
Key Takeaway: Ethereum’s utility is shrinking as users migrate to L2s and competitors.
2. Staking Withdrawals Add Sell Pressure
Since the Shanghai upgrade, over 4.2 million ETH ($10B+) has been unstaked, with a significant portion sold.
ETH Staking Withdrawals (2023-2025):
- Total Unstaked: 4.2M ETH
- Estimated Sell Pressure: $10B+
This has created a persistent downtrend in ETH/BTC.
Can Ethereum Recover?
Bullish Factors
- Ethereum ETF Approvals? (If SEC greenlights, could boost demand)
- Further Scaling Upgrades (Full Danksharding could reduce fees)
- Institutional Interest (If regulatory clarity improves)
Bearish Factors
- Continued L2 Dominance (Less ETH burned, weaker mainnet demand)
- Bitcoin’s Dominance (BTC remains the safe-haven crypto)
- Competitor Growth (Solana, Cardano, Avalanche gaining market share)
FAQ: Ethereum Price Crash Explained
1. Why has Ethereum dropped 77% against Bitcoin?
- L2 solutions reduce mainnet demand.
- High fees push users to competitors.
- Regulatory uncertainty scares investors.
- Staking withdrawals increase sell pressure.
2. Will Ethereum ever recover against Bitcoin?
It depends on:
- Regulatory clarity (SEC decisions).
- Adoption of Ethereum’s scaling solutions.
- Whether ETH can reclaim its DeFi/NFT dominance.
3. Is Ethereum still a good investment?
- Short-term: Risky due to sell pressure.
- Long-term: Depends on upgrades and adoption.
4. What’s better: Ethereum or Bitcoin?
- Bitcoin: Store of value (lower risk).
- Ethereum: Higher risk, but potential if scaling succeeds.
Also Read | https://cryptonewsrank.com/dotchain-coin-price-surge-2025-prediction/
Conclusion: Ethereum Price Crash Battle
Ethereum Price Crash 77% against Bitcoin reflects deeper structural issues: high fees, regulatory risks, declining network activity, and rising sell pressure from staking withdrawals. While upgrades like Danksharding could improve scalability,
ETH must overcome fierce competition, shifting investor sentiment, and Bitcoin’s dominance to stage a meaningful recovery. Its future hinges on execution—failure to adapt risks further erosion against BTC.
For now, Bitcoin remains the dominant crypto asset, while Ethereum struggles to reclaim its former glory.