The correlation between Bitcoin and Ethereum has dropped below its average of 0.71 for the first time since 2021.
Jerrymusa.com reports that this development coincides with a wider market decline, with prices for BTC and ETH down by almost 6% in the last week to $40,991 and $2,463, respectively. In the past, the market movements of BTC and ETH have shown a strong link.
However, given Ethereum’s recent depreciation and the fact that its trade volume has increased without the derivatives market showing any signs of recovery, it is unclear where the cryptocurrency will end up in the future.
Bitcoin Has Shown an Outstanding Return
In stark contrast, the Bitcoin market experienced substantial growth ahead of the introduction of ETFs.
When one looks back at Bitcoin’s history, one can see that it has shown an astounding 100% return over the last year, surpassing Ethereum’s 60% gains.
A turning point was reached with the licencing of spot Bitcoin ETFs; BTC prices fell while ETH saw a surge, driven by There was talk that it would be the next to get approved as an ETF.
Bitcoin and Ethereum’s Relationship is Changing
Prior to this, investors had concentrated on “ETH beta” tokens, which are more volatile than Ethereum but nonetheless closely related to Ethereum, such as Arbitrum (ARB) and Optimism (OP).
But this tendency reversed after ETF certification, with ETH demonstrating relative durability by posting the least decrease and these beta tokens seeing a downturn.
The state of affairs at the moment highlights how Bitcoin and Ethereum’s relationship is changing. While Bitcoin’s journey to become an ETF accelerated its market presence, Ethereum’s trajectory is less obvious.
Its diminished association with Bitcoin implies the possibility of autonomous market dynamics.
However, uncertainty is injected by the absence of conventional rally indications in derivatives markets and the move away from ETH beta tokens following the legalisation of BTC ETFs.