Ethereum has reached “one of its deepest undervaluation zones in years,” according to analysts at crypto asset manager Bitwise.

A note shared with Decrypt says the second-largest cryptocurrency has been “consistently underperforming” against Bitcoin since late 2022, with ETH/BTC values suffering as a result.

At the time of writing, 1 ETH buys 0.027 BTC—down 47% over the past 12 months, according to CoinGecko data.

But Bitwise Europe’s head of research, Andre Dragosch, argues Ethereum “is fundamentally mispriced relative to on-chain activity and adoption metrics.”

Growing interest in artificial intelligence, meme coins and the tokenization of real-world assets have been blamed for ETH’s disappointing performance.

“[These] areas benefit from lower transaction costs, leaving Ethereum’s often congested and expensive network at a disadvantage,” the note says.

Dragosch adds that the rise of Layer 2 scaling solutions “has fragmented activity across multiple ecosystems, limiting the value directly captured by Etheruem’s base layer.”

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Author: Connor Sephton