Five structural factors have been compounding throughout 2026.

ETH has a 0.78 correlation to the Nasdaq 100 versus Bitcoin’s 0.55 (MEXC, May 2026). When Treasury yields rise and institutional investors de-risk from technology stocks – as in the US-Iran macro shock of May-June 2026 – Ethereum gets sold harder and faster than Bitcoin. Bitcoin’s digital gold narrative gives it a different investor base.

US spot Bitcoin ETFs have accumulated over 1 million BTC collectively since January 2024. Ethereum spot ETFs, approved in July 2024, have attracted significantly smaller inflows – a structural demand imbalance that continues to favour BTC over ETH.

Ethereum’s Layer-2 networks – Arbitrum, Optimism, Base – have become extremely efficient at processing transactions cheaply, but the fees they generate accrue to the L2, not to the Ethereum base layer. This has reduced Ethereum’s fee burn rate, weakening the deflationary pressure on ETH supply that drove the ratio higher in 2021.

In the early phase of crypto market cycles, Bitcoin tends to attract capital first. ETH typically outperforms in the later, more speculative phases of bull runs. With the current cycle in a risk-off phase, Bitcoin’s relative performance vs ETH is consistent with historical patterns.

5. Glamsterdam upgrade uncertainty

Ethereum’s Glamsterdam upgrade – targeting 10,000 TPS and 78% lower L1 gas fees – was delayed from Q2 to end-August 2026. Upgrade delays have historically weighed on the ETH/BTC ratio as investor attention moves elsewhere.