Is it appropriate to switch positions now with Bitcoin leading the surge?

Shri

As of the time of writing, Bitcoin has surpassed $67,000 and Ethereum has surpassed $3,500.

During this period, Bitcoin and Ethereum have seen minimal corrections, consistently trending upward, with Bitcoin essentially leading the surge.

To my recollection, at the beginning of this bear market, the ratio of Bitcoin to Ethereum was approximately 1 Bitcoin for 14 Ethereum. Later, as the Bitcoin ecosystem flourished, this ratio shifted to around 1 Bitcoin for 18 to 19 Ethereum and has remained so to the present.

During this time, with Bitcoin leading the surge and the prolonged high ratio of Bitcoin to Ethereum, some readers have asked the following question: Should Bitcoin be exchanged for Ethereum?

The main reason for the rise in the Bitcoin-to-Ethereum ratio from 14 to 18-19 in this round is, in my opinion, primarily due to the development of the Bitcoin ecosystem: after the emergence of script technology, the Bitcoin ecosystem saw a batch of new assets with relatively high consensus besides Bitcoin itself. Then, applications such as DeFi and second-layer extensions appeared around these new assets on Bitcoin. This situation is unprecedented in the development of the Bitcoin ecosystem.

This vibrant development has attracted significant project funds and investor capital.

I believe that in the short and medium term, the momentum of the Bitcoin ecosystem will remain strong, while the Ethereum ecosystem currently shows no strong signs in comparison.

This may be an important internal factor supporting the high exchange rate of Bitcoin to Ethereum in the short to medium term.

In addition, there is an external factor worth noting: after the approval of the Bitcoin ETF, a large amount of traditional funds will be able to flow into Bitcoin through ETFs, which will be an important force driving the rise in the price of Bitcoin.

The recent surge in Bitcoin has largely been the result of FOMO sentiment among traditional funds, which are continuously flowing in from off-exchange.

It can be imagined that, next, when Bitcoin breaks through the previous high and sets a new high, the pursuit sentiment of traditional funds will be even stronger, and they will more aggressively flow into Bitcoin.

So, currently, from these factors, Bitcoin's relative strength compared to Ethereum has very important conditions supporting it, and this strength is likely to continue in the short and medium term.

Therefore, under the current circumstances, I would not switch from Bitcoin to Ethereum.

Is it possible for this ratio to decline later and for Ethereum to see a significant surge?

I think it requires two conditions:

First, there must be a new outbreak point in the Ethereum ecosystem. This outbreak point is not just the popularity of a project or a protocol but the popularity of the entire ecosystem. Only when the ecosystem is booming can it drive the emergence of a large number of projects, create a clustering effect, and be attractive to large funds.

The second is that there must be a large-scale inflow channel for off-exchange funds into Ethereum. Now that Bitcoin has legal and compliant channels to attract off-exchange funds, Ethereum must also have similar legal and compliant fund channels to compete with this volume of funds. Otherwise, in terms of funds, it cannot compete with Bitcoin.

The most important thing to watch for whether this channel can be opened is whether the U.S. Securities and Exchange Commission can approve the Ethereum ETF.

So, based on the above views, I believe that unless there is an outbreak in the Ethereum ecosystem or Ethereum can have a fund channel similar to Bitcoin ETF, the high Bitcoin-to-Ethereum ratio is likely to be maintained in the short to medium term.

Of course, when I say that this high ratio will be maintained, it doesn't mean that Ethereum will not rise or that this high ratio will remain so high forever, but rather that even if the ratio falls, it won't fall much, at least it will be difficult to fall back to the state where 1 Bitcoin exchanges for 14 Ethereum in the short to medium term.

Niti998

Bitcoin's upward trend is also very rapid.

Nimmi373

This aspect has also been neglected.