Ethereum Faces Historic Decline Against Bitcoin: What’s Behind the Drop?

Ethereum (ETH), the second-largest cryptocurrency, has reached its lowest value against Bitcoin (BTC) in nearly five years. This significant drop brings ETH/BTC close to levels last seen when Bitcoin was trading under $10,000. Despite this sharp decline, the Ethereum community remains optimistic about the network’s long-term potential, even amid ongoing criticism.

ETH/BTC Hits Record Low Amid Market Turmoil

On February 3, 2025, the ETH/BTC trading pair plummeted to 0.02389, meaning one Bitcoin is now worth approximately 41.86 ETH. This marks an extraordinary decline, particularly as the crypto market continues to experience significant turbulence.

The most dramatic drop occurred around 5:00 AM UTC when ETH/BTC fell from 0.029 to 0.02389 in under 15 minutes. This level hasn’t been seen since April 2020, a time when Bitcoin’s block rewards were still 12.5 BTC per block, and platforms like Terra and FTX were yet to mark their first anniversaries. Back then, Bitcoin was struggling to stay above $6,000–$8,000 following the infamous “Black Friday” crash of 2020.

Ethereum’s Decline in Context

Over the past 12 months, ETH/BTC has lost 50% of its value. Meanwhile, Bitcoin’s market dominance has surged to over 63%, its highest level since Q4 2021. The widening gap between Bitcoin and Ethereum reflects shifting investor sentiment and market structure, with Bitcoin solidifying its position as the leading cryptocurrency.

As of today, the entire crypto market has suffered a brutal downturn. Bitcoin has dropped to $92,000, while Ethereum has touched $2,450. In just 24 hours, the total crypto market capitalization has shed a staggering $230 billion, making this one of the most severe market contractions in history.

Regulatory Uncertainty and Market Liquidations

The ongoing crash has been fueled by growing fears over potential regulatory restrictions on crypto trading in the United States, Canada, China, and Mexico. As a result, market participants are reacting with panic, leading to large-scale liquidations across major exchanges.

According to data from CoinGlass, approximately 750,000 traders have been liquidated in crypto derivatives markets over the past 24 hours. The total value lost exceeds $2.32 billion, with the largest single liquidation—$38.78 million in BTC/USDT—occurring on the HTX exchange.

Crypto Sentiment Turns Bearish

The Crypto Fear and Greed Index has dropped to 44/100, signaling a shift from “Extreme Greed” to “Fear” in just a week. This drastic sentiment change reflects uncertainty and hesitancy among investors, who are now weighing potential risks more cautiously.

Despite the overall market downturn, some assets have shown signs of recovery. Bitcoin has bounced back slightly to $95,400, while Solana (SOL) has reclaimed the $200 level. However, Ethereum and XRP continue to trade in deep negative territory, struggling to regain momentum.

What’s Next for Ethereum?

Ethereum’s continued decline against Bitcoin raises concerns about its market position and adoption. While ETH remains a leading smart contract platform, its underperformance compared to Bitcoin suggests that investors are increasingly favoring BTC as a safer store of value during market turbulence.

For Ethereum to regain strength, positive catalysts such as technological upgrades, institutional adoption, or regulatory clarity may be needed. Until then, the ETH/BTC ratio remains under pressure, and investors will be watching closely for any signs of a potential rebound.

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