Remember When Everyone Said Ethereum Would Beat Bitcoin? Here’s What Actually Happened

Back in 2021, if you asked a crypto person which coin would end up on top, a surprising number said Ethereum. Bitcoin was “boring old digital gold.” Ethereum was the “world computer” — the platform everything else would eventually be built on.

The word everyone used was the flippening — the moment Ethereum would flip past Bitcoin and become number one.

It didn’t happen. And right now, Ethereum is having one of its worst stretches in years. Let me explain what changed — no jargon, no hype, just the full picture.

The Simple Version

Ethereum (ETH) is the second-biggest cryptocurrency. A year ago, one ETH cost about $4,750. Today it costs about $1,886 — down roughly 60%.

Bitcoin, by comparison, is down about 49% over that same stretch. Bitcoin is having a terrible year too — but Ethereum is doing noticeably worse.

And here’s the number that tells the real story: of every $100 in all of crypto combined, about $56 sits in Bitcoin, but only about $10 sits in Ethereum. That $10 share is close to the lowest it has ever been.

Translation: the race Ethereum was supposed to win? It isn’t just losing. It’s getting lapped.

What the “Flippening” Was

Let me back up, because this was a genuinely big deal.

Crypto people have a name for the idea that Ethereum would one day become the biggest crypto and dethrone Bitcoin. They call it the flippening.

The logic went like this. Bitcoin does one thing: it’s digital money you can send without a bank. That’s about it.

Ethereum, by comparison, is like a smartphone. You can build other programs on top of it — lending apps, trading apps, games, digital art. A whole financial system that runs itself, with no bank in the middle.

The bet was simple: because Ethereum could do more, it would eventually be worth more. For years, that bet looked smart. Ethereum’s share of crypto climbed from almost nothing to about 20% at its peak.

What Actually Happened

Then the market turned. And when everything started falling, the thing people expected to win… didn’t.

Here’s the honest scoreboard for the last year:

Nobody is having a good year. But notice the pattern: when things get scary, Bitcoin — the “boring” one — holds up better than the “exciting” ones.

There are three reasons Ethereum specifically has struggled, and they teach you more about how crypto actually works than any analyst’s prediction.

1. Scared money wants “boring,” not “smart”

When you’re nervous, you don’t want the most interesting investment. You want the safest one.

Bitcoin has become crypto’s safe option — its version of gold. There are now funds called ETFs that hold actual Bitcoin, and normal people can buy them in a regular retirement account, no crypto app required. Big, risk-averse money — the pension-fund kind — has poured tens of billions of dollars into Bitcoin this way.

Ethereum eventually got its own ETF too. But it’s smaller, and the big money hasn’t embraced it the same way. To an institution deciding where to park a billion dollars, “digital gold” is an easy story. “A programmable world computer” is a harder one.

2. The competition caught up

Ethereum’s whole pitch was that it could run apps. The problem: so can a bunch of newer, faster, cheaper networks now — and Solana is the most popular.

Here’s the part that matters to a normal person: using Ethereum costs money. Every time you do anything — send money, use an app — you pay a fee (called a gas fee). When the network is busy, that fee can spike to $20, $50, sometimes more. That’s fine if you’re moving $100,000. It’s absurd if you’re buying a $30 game item.

Solana was built specifically to fix this. On Solana, the same kind of action costs a fraction of a penny and takes about a second. So the developers building the next fun thing — the games and apps people actually use — increasingly pick Solana instead. (We covered Solana in full here.)

The result: Ethereum isn’t the only “world computer” anymore. It’s the most famous one — but not necessarily the best one anymore.

3. Ethereum’s value depends on people actually using it

This is the deepest reason, and the one most articles skip.

Bitcoin’s value is mostly a story: it’s scarce (only 21 million will ever exist), it’s been around for 17 years, and it’s a place to store money. People hold it.

Ethereum’s value is more like a business. It’s worth something because people build things on it and use them — lending apps, trading platforms, that whole “financial system with no banks” (which has its own name, DeFi). In the good times, millions of people used these every day, and Ethereum sat at the center of all of it.

But a bear market is exactly when people stop using things. Fewer people borrowing, trading, and playing. Less activity means less demand for Ethereum — and the story cools off at precisely the wrong moment.

The Honest Other Side

Because this newsletter’s whole job is the full truth, not the cheerleader version:

Ethereum is not dead. Not even close. It’s still the second-biggest crypto by a wide margin. It still has more developers building on it than almost anyone else. It still has tens of billions of dollars locked up in its apps — more than most other networks combined. A $10 share out of every $100 is still enormous.

This has happened before. Ethereum crashed over 90% in 2018. Everyone declared it dead. Then it came back and led the next boom. Crypto runs in cycles, and Ethereum has survived more of them than almost anything else.

The flippening could still happen someday. Not soon — probably not this cycle. But Ethereum’s underlying idea, that software rather than banks can run finance, hasn’t gone anywhere. What changed is that it now has real competition.

What This Means For You

If you’re a normal person just trying to make sense of crypto, here’s the takeaway that matters:

The market is telling you something loudly: boring beats clever when people are scared. That’s not a crypto thing — it’s a money thing. It’s the same reason people sell risky tech stocks and buy boring government bonds in a recession.

And the deeper lesson: “crypto” is not one thing. Bitcoin and Ethereum are completely different bets. Bitcoin is a bet that digital gold will keep being trusted. Ethereum is a bet that people will keep building and using apps on it. Those bets can move in opposite directions — and right now, they are.

So the next time someone confidently tells you “Ethereum is the future” (or “Ethereum is dead”), you’ll know the better question: compared to what, and for what? The answer isn’t in the hype or the panic. It’s in whether people are actually using the thing — and that’s a number you can look up.

New to all of this? Start with What is a blockchain?, then Bitcoin explained and Ethereum explained.