Ethereum to Bitcoin Ratio Hits 2022 High in Merge Run-Up

The ETH:BTC ratio hit 0.084 Tuesday. 

Ethereum Rallies Against Bitcoin

With “the Merge” now days away, Ethereum is surging against Bitcoin. 

TradingView data shows that the ETH:BTC ratio climbed to a 2022 high early Tuesday, topping 0.084 for the first time since December 2021. The ETH:BTC ratio has jumped around 58% from roughly 0.053 in mid-July. The “ratio” refers to the cost of 1 BTC in ETH terms. At a ratio of 0.084, 1 BTC is worth roughly 12 ETH.

Ethereum enthusiasts have discussed the ratio at length in the past in tandem with “the flippening”—a hypothetical event that would see Ethereum overtake or “flip” Bitcoin’s market capitalization. The ETH:BTC ratio topped 0.1 back in June 2017 and January 2018, but for the flippening to occur, it would need to hit roughly 0.159 based on the current circulating supply of both assets (as the ETH and BTC coin supplies adjust over time, the ratio also changes). 

Ethereum’s current lead against Bitcoin can be explained by growing hype for the Merge, the number two blockchain’s long-awaited Proof-of-Stake upgrade. The Merge is due to ship sometime between September 13 and 15, and the first part of the event is happening today. Dubbed Bellatrix, the first step of the upgrade will see Ethereum update its consensus layer ahead of the Merge itself. The second phase, known as Paris, will then complete when the Terminal Total Difficulty threshold hits 58750000000000000000000, marking the difficulty required to mine the final block under Proof-of-Work. After that, all new Ethereum blocks will be added to the chain by validators staking ETH. 

Market Awaits the Merge 

After suffering from years of delays, the Merge is widely expected to be the biggest crypto event of 2022. It’s set to bring several major changes to Ethereum, including a 99.99% reduction in energy consumption and 90% cut in ETH issuance. That’s partly why ETH has rallied in recent weeks. Interest surrounding the update is such that many Ethereum-adjacent tokens, including the likes of Ethereum Classic’s ETC and Lido’s LDO, have rallied alongside ETH over recent weeks. Ethereum Classic has benefited because miners are moving over to the network before they become obsolete on Ethereum; its hashrate hit a record high Monday. One group of Proof-of-Work advocates is also planning to fork Ethereum to create a new network that maintains a hub for miners. Known as EthereumPOW, the initiative is expected to follow the Merge, and could potentially lead to an airdrop of tokens on the new chain for ETH holders. Several major exchanges, including FTX and Binance, have confirmed plans to support the airdrop in addition to the Merge. 

Per CoinGecko data, ETH was trading at $1,664 at press time, up roughly 6.2% over the past 24 hours. 

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.