———— Hi, everyone, this is Brother Bit ———
Number of words in this article｜1653 Bit Brother｜Focus on the cognitive upgrade of the currency circle, only speak human words, not metaphysics. No gods are allowed here. We only talk about trends, risks and human nature to help you avoid pitfalls and be less impulsive. I hope you can keep your principal and your own rhythm in the emotional tsunami of the market. ▼ Please pay attention and stop carrying the market alone. There is one phenomenon that is particularly eye-catching in this market round of 2024-2025: Bitcoin continues to hit new all-time highs, while Ethereum has been falling from around US$4,000, unable to even "follow the rise". This has been extremely rare throughout the history of cryptocurrency. In the past three bull markets, there is an iron rule: 👉 Ethereum has always risen higher than Bitcoin. For example, in the last round (2020–2021): the big pie increased by 14 times and the second pie increased by 52 times. Why is it completely reversed this round? To explain this problem, we must start with the capital structure.
01
The passage of ETF has changed the "era where funds only come into two pieces." Historically, Ethereum has outperformed because:- Retail investors like to speculate on stories
- Institutions cannot buy BTC
- Shanzhai siphons funds through ETH Narrative
- Ethereum Ecological Prosperity (DeFi/NFT/Layer2)
But starting in 2024, everything is redefined. 1) Spot ETF opens the institutional entrance. After passing the Bitcoin spot ETF in the United States, the path of funds becomes: ➡ US stock account ➡ ETF product ➡ Direct purchase of BTC ➡ Long-term lock-in. As of the beginning of 2025, the total amount of spot ETF holdings exceeds 1.2 million Bitcoins. This is a "black hole absorption model" that will never return to the chain. In the past, it was very troublesome for institutions to allocate BTC, but now they only need to click one click to buy. And ETH? It didn’t pass until very late, and Grayscale was selling like crazy. 2) ETFs will not buy ETH, let alone copycat institutions. The allocation logic is always: - Buy the strongest assets first
- Buy the second one in market capitalization
But this round of strong assets has become: 👉 Only Bitcoin has “institutional-level security.” Ethereum: - Cross-chain bridge security is poor
- Software complexity is extremely high
- Layer2 makes ETH itself like a "settlement layer" and no longer scarce
Institutions understand BTC but not ETH. This is the fundamental bifurcation point.
02
The value narrative of the big pie is clear, while the narrative of Ethereum is fragmented 1) Bitcoin’s narrative is becoming more and more stable- Sovereign national reserve assets
- Institutional allocation of assets
- ETF black hole absorption
The narrative grows stronger with age, and Bitcoin has become a shadow rival to the global monetary system. 2) The narrative of Ethereum is becoming increasingly blurry. 2017: Smart Contract Platform 2020: DeFi 2021: NFT 2022: Layer 2 + Rollup 2023: Restaking 2024: AI + L2 + Sharding + Modular narrative. There are too many and too confusing narratives. In essence: 👉 ETH doesn’t even know who it wants to be. In the past, because of its rapid growth, no one questioned it, but when funding began to become cautious, narrative fragmentation became a fatal point.
03
The wave of death of copycats has further dragged down the performance of Ethereum and its poor performance, directly leading to:- Copycats continue to plummet
- Funds are withdrawn from the ETH ecosystem
- Most of the trading volume goes to BTC & ETFs
- Bull market enthusiasm declines
This is the feedback loop: ETH is sluggish → copycats are deserted → overall liquidity declines → ETH is weaker. In the past, ETH was the engine for the rise of copycats, but this time it has become the "reverse vane" of the entire copycat circle.
04
2024–2025 is the era when “institutions > retail investors” appeared for the first time in crypto. The past three bull markets were dominated by retail investors, and retail investors like:- Engage in public chain war
- Speculating on project party sentiment
But starting from 2024–2025, the market will become for the first time: 👉 Institutional funds dominate. Organizations don’t look at emotions, stories, or ecology, they only look at: - Can it strengthen the balance sheet?
And at this point, if ETH wants to win BTC, the difficulty is almost zero.
05
Can ETH be reversed? The answer is very realistic: it is difficult not because ETH technology is not good, but because: 1) BTC’s currency positioning has been completely locked. The more people hold it and the more countries adopt it, the harder it is for ETH to reverse. 2) Institutions will not allocate BTC to ETH. BTC is a treasury bond model and ETH is a technology stock model. The former is stable and the latter is unstable. 3) The Shanzhai ecology will always rely on ETH, but Shanzhai is dying, which means that the growth engine of ETH has failed. 4) Layer2 dilutes the narrative of ETH. L2 essentially means: fragmenting the value of ETH into dozens of competitors. Value is dispersed and growth is blocked.
06
Summary: It’s not that ETH is getting weaker, but that BTC is too strong. The core is not that there is a problem with ETH, but that BTC has undergone a historic transformation:- Federal Reserve Currency Spill
- Increased financialization
- Shifting market preferences
This is a macro structural change, not a technical competition. ETH will still rise in the future, but: 👉 It is no longer an "rising engine". 👉 It is no longer a "cycle driver". 👉 It’s no longer “the asset that beats BTC”.
Disclaimer: This article is for analysis only and does not constitute investment advice.
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