Key Takeaways:
Ethereum has lost nearly two-thirds of its value against Bitcoin since transitioning to proof-of-stake, a decline critics attribute to execution failures and missed market opportunities.
Ether fell 65% against Bitcoin since the Merge on Sept. 15, 2022, as execution stumbles and strategic drift eroded investor confidence in the largest altcoin.
"Ethereum's post-Merge roadmap promised scalability through rollups and data blobs, but the market has priced in delays and competitive pressure from faster L1s," Jason Wu, on-chain analyst at Edgen, said. "The ultrasound money narrative collapsed when ETH supply turned inflationary again."
The ETH/BTC trading pair has declined from approximately 0.082 BTC at the Merge to roughly 0.029 BTC as of July 18, 2026, a 65% slide. Bitcoin's market dominance has climbed from about 39% to over 55% during the same period, according to CoinGecko data. Ethereum's supply has grown by more than 500,000 ETH since the Merge, reversing the deflationary trajectory that had fueled the ultrasound money thesis.
The underperformance has accelerated capital rotation from ETH to competing Layer-1 chains. Solana's DeFi total value locked has grown to $18 billion from $1.5 billion at the time of the Merge, per DefiLlama. Ethereum's Layer-1 monthly fee generation has fallen from over $400 million to roughly $110 million as users transact on Arbitrum, Base, and Optimism, according to Dune Analytics data.
Spot Ethereum ETFs in the U.S. have seen net outflows of $1.2 billion over the past six months, compared with $8.4 billion in inflows for Bitcoin ETFs over the same period, data from The Block shows. The Ethereum Foundation has not announced a timeline for its next major network upgrade, and key developer departures have added to uncertainty about the roadmap.
This article is for informational purposes only and does not constitute investment advice.
