Ether at two-month low against Bitcoin due to Bitcoin’s strong rally fueled by ETF.

The ratio between ether and bitcoin (ETH/BTC) has fallen to a two-month low as bitcoin has risen due to increasing market optimism about the possibility of a spot bitcoin exchange-traded fund (ETF).

TradingView data shows that Ethereum’s value against bitcoin, which has been declining since the beginning of the month, has reached 0.0615.

The weakening relationship reflects bitcoin’s stronger price gains in the past month. Bitcoin has increased by 10% during that period compared to Ethereum’s 1% increase.

Bitcoin has surged this week as the market has fully absorbed asset management giant BlackRock’s application for a spot bitcoin ETF, as well as similar filings by well-known financial services companies Invesco and WisdomTree.

BTC has likely also benefited from not being included among the 19 listed tokens in lawsuits earlier this month by the U.S. Securities and Exchange Commission (SEC) against exchanges Binance and Coinbase, according to Anthony Georgiades, co-founder of Pastel Network, who told blockchain. The other tokens dropped by double digits in the days following the suits, although they have recovered in this week’s market rebound.

“With regulatory uncertainty around labeling certain digital assets as securities, bitcoin is the only digital asset to remain – in the lens of regulatory agencies – sufficiently decentralized and certainly not a security,” said Georgiades.

Georgiades noted that if there are no exogenous shocks, like a credit crisis, the market might expect certain speculation or trading rotation to drive inflows from BTC into ETH. “Ethereum’s unique aspects, such as its ability to facilitate a wide range of applications from DeFi to NFTs, is a key differentiator from Bitcoin and presents unique value propositions,” he said.

According to Nauman Sheikh, head of protocol and treasury management at Wave Digital Assets, bitcoin’s upcoming halving next year has also further bolstered bitcoin’s position. He added that “bitcoin’s dominance is unlikely to fade in the near future. As a result, the ETH/BTC ratio has hit a 2023 low at 0.0615. However, this ratio could further decline to the 0.05 to 0.055 range last seen in the summer of 2022, which may present an opportune moment for investors to favor ethereum over bitcoin.”

Edited by James Rubin.