“Interest in Ethereum is waning,” Analyst Says, Revealing the Altcoin That’s Gaining Interest Instead of ETH
Investors have reportedly lost faith in ETH as Ethereum has consistently failed to match Bitcoin’s significant gains. Sentiment around Ethereum (ETH) is at its lowest level in years, despite recent developments like BlackRock’s BUIDL fund, according to Luke Nolan, a researcher at CoinShares.
This waning optimism coincides with the rise of smaller altcoins like Solana, which are attracting investors who no longer expect their Ethereum investments to generate as high returns as they have in the past. Nolan noted that while some people may not consider ETH an altcoin per se, its performance relative to Bitcoin is a strong benchmark for understanding current market dynamics.
According to the analyst, as Bitcoin ETFs continue to gain momentum, the price difference between Bitcoin and Ethereum may become more pronounced. Nolan predicts that the ETH ETF will almost certainly be rejected in May, which will reduce flows into ETH in existing exchange-traded products (ETPs).
Ethereum is the largest among altcoins with a market value of $384 billion. However, according to Nolan, this success is a double-edged sword. The analyst explained that ETH’s large market cap has led investors to turn to lower-valued alternatives, with Solana emerging as a popular choice.
Most investors assume that it will be difficult for Ethereum’s market cap to surpass Bitcoin’s market cap, which currently stands at $1.27 trillion. This perception limits the upside potential seen by Ethereum investors.
In contrast, Solana has a relatively low market cap of $64 billion, despite rising 546% in the past year, leaving more room for growth. Investors also started to pay more attention to the price of Solana compared to other cryptocurrencies. Nolan observed a significant increase in interest in SOL/ETH and SOL/BTC pairs this cycle compared to the previous one.
Nolan believes approval of a spot Ethereum ETF would help increase interest, and he expects an ETF to be approved likely in 2025.
*This is not investment advice.