Ethereum Struggles as Investors Switch to SOL and BTC – Will 2025 Provide Relief?

• ETH attracted low interest from investors compared to BTC and SOL.
• Per crypto hedge fund, ETH could see renewed interest in 2025.

Ethereum (ETH) has struggled this cycle amid record high FUD, and investor attention shifted elsewhere.

According to Zaheer Ebtikar of crypto hedge fund Split Capital, ETH has lagged behind others due to the ‘middle child syndrome’.

“$ETH is really struggling with middle child syndrome. The asset is not in vogue among institutional investors, the asset has lost favor in crypto private capital circles, and the retail sector is nowhere in sight offering anything of this magnitude.”

Investors are leaving ETH

Among the crypto majors, ETH offered investors just 8% on a YTD (year-to-date) basis, compared to double digits in Bitcoin (BTC) And Solana (SOL).

Ebtikar linked the underperformance to investors’ focus on BTC and other ETH competitors such as SOL and Sui (SUI).

The executive noted that there are three sources of capital in the crypto space: institutional (via ETFs/futures), private capital (liquid funds, VCs), and finally retail. But right now, only the first two mattered.

He added that institutional capital was heavily focused on BTC (via ETFs). ETH ETFs have seen it net negative flows of $546 million since they debuted in July, underscoring the low interest.

On the other hand, Ebtikar stated that private capital viewed ETH as overvalued and diverted capital to other ETH competitors that were perceived as undervalued, such as SOL, Celestia (TIA), and SUI.

“$ETH is too big for its own capital to support, while at the same time it can support other index assets like $SOL and other large caps like $TIA, $TAO and $SUI.”

Coinbase analysts too echoed the above sentiment in their September report.

Source: SOLETH ratio, TradingView

The SOLETH ratio, which tracks the value of SOL against ETH, has exploded since last year, confirming Ebtikar’s thesis that investors may have switched from ETH to SOL.

That said, Ebitaker also acknowledged that ETH was the only altcoin with an approved ETF in the US.

As such, he predicted that the asset could see renewed interest from 2025, especially from institutional investors.

He mentioned likely increased demand from ETF buyers, changes within the Ethereum Foundation and Trump’s victory.

At the time of writing, ETH was valued at $2.4k and has been consolidating between $2.3K and $2.5K since early October.

Source: ETH/USDT, TradingView