Foreign media, citing Bitget Research, reported that Ethereum's recent weakness relative to Bitcoin reflects a shift in institutional investment preferences rather than a long-term deterioration in ETH's fundamentals. Analysts believe that funds continue to flow into Bitcoin's "digital gold" narrative, pushing the ETH/BTC ratio to multi-year lows.

BTC is attracting more institutional funds

Ryan Lee, chief analyst at Bitget Research, said that Bitcoin is reinforcing its position as a reserve asset, making it easier to attract institutional demand than Ethereum. In contrast, Ethereum still primarily serves decentralized applications, on-chain finance, and blockchain infrastructure, and its pricing logic is more geared towards a "utility asset."

The article argues that this difference has led to different types of funds being channeled into the two asset classes during the same cycle. Bitcoin benefits from the narrative of a macro asset and store of value, while Ethereum relies more on on-chain applications, tokenization, and DeFi activity to drive demand.

The ETH/BTC ratio has fallen to a multi-year low.

Despite the ETH/BTC ratio falling to multi-year lows, analysts believe this is more of a cyclical rotation of funds than a rewriting of the long-term landscape. The report notes that the crypto market has historically switched between different narratives, with Bitcoin initially absorbing macro-level funding, followed by Ethereum absorbing expectations of innovation and application growth.

Based on this assessment, the current divergence does not necessarily mean that ETH will continue to underperform. If the market refocuses on on-chain finance, asset tokenization, and practical applications, Ethereum still has a chance to regain funding.

Regulatory progress is seen as a key catalyst

The article notes that regulatory clarity in the United States remains a crucial variable influencing both BTC and ETH, especially with the advancement of framework legislation like the Clarity Act. Analysts suggest that if these developments reduce compliance uncertainty, they could attract new institutional funds into the market.

Bitcoin is likely to continue to benefit from the expanded adoption of reserve assets, while Ethereum is more likely to benefit from a resurgence in institutional interest in tokenization, DeFi, and on-chain financial activities. The report also points out that if the macroeconomic environment stabilizes and the tokenization of real-world assets continues to expand, the ETH/BTC ratio may gradually recover in the coming months.

Market volatility remains relatively mild.

Analysts believe the overall market remains relatively stable regarding the recent correction. The article states that current low leverage levels and controlled volatility indicate that this pullback is more of a healthy consolidation than a structural deterioration.

The report also noted that Ethereum found support around the $1,900 to $2,000 range. This suggests that the market is currently experiencing more asset rotation than a concentrated sell-off.