Ether trades around $2,240, about 55% below the $4,946 high of 24 August 20251. Against Bitcoin it trades at 0.0294, a level it first fell to in 20202. The question we set ourselves in September was whether Ethereum's six-year underperformance of Bitcoin is a cycle or a structure. The answer we arrived at is in one comparison: Ethereum holds 54% of all DeFi collateral and about half of all stablecoins, and over the last thirty days the chain earned $6.3 million in fees. Tron earned $23.4 million11. Everything settles on Ethereum. Almost nothing pays for it.
A note on timing: this piece was announced in our September research calendar for 14 September and is published today, two months late. The analysis is as of 6 November 2026. We do not backdate.
Where we are now
In dollars, 2026 has been a round trip. ETH opened the year near $2,970, fell to $1,505 on 6 June, rallied to $2,808 in September and closed October at $2,255, down 16% on the month against Bitcoin's 7%23. Monthly closes: January $2,452, February $1,964, March $2,106, April $2,258, May $2,007, June $1,572, July $1,862, August $2,468, September $2,686, October $2,255. Year to date the token is down about 25%.
In Bitcoin, which is the measure this piece is about, the ratio made a cycle low of 0.0258 on 6–7 June, its lowest since April 2020, then rose for three consecutive months to 0.0321 at the start of October2. That was briefly called the end of a five-year downtrend. October took back most of it: 0.0291 at month end, 0.0294 today. For scale, the ratio's 2021 peak was 0.086, the December 2025 high was 0.0361, and the level analysts set for a genuine regime change is a weekly close above 0.03524. Ether is 16% below that line.
The bull case
1. The float is shrinking
44.4 million ETH, 36.4% of supply, is staked, up from 29.3% at the end of 2025, and another one million ETH is waiting in the entry queue with a seventeen-day wait89. Exchange balances are 14.5 million ETH, the lowest since 20205. BitMine holds 6.06 million ETH, 4.9% of everything in existence, 86% of it staked, and has not sold a coin16. Staking inside the ETFs is live: BlackRock's staked trust alone holds $1 billion and pays a 1.78% reward rate9. Less ether for sale, more ether locked, with a regulated yield on top.
2. The economy is here
Ethereum's DeFi TVL is $43.4 billion, about 54% of the industry, against $5.9 billion on Base, $5.3 billion on Solana and $5.0 billion on Tron12. Of roughly $300 billion in stablecoins, Ethereum carries $142 billion, 47.6% of the total13. About 47% of tokenised real-world assets sit on it. Its developer count, 8,779 in the year to October, is more than three times Solana's14. When a bank, an asset manager or a stablecoin issuer chooses a settlement layer, they still choose this one.
3. The ratio has already bottomed
A six-year low in June, three green months after it, and a price 14% above the low in Bitcoin terms. If 0.0258 was the capitulation, the bull case says the trend has turned and the October setback is the retest.
The bear case
Now the argument against, and it is the one we find harder to answer.
The fee engine is broken, and the roadmap broke it on purpose. Over the thirty days to mid-October, Ethereum issued about 2,969 ETH a day and burned 13.6. The burn is 2.8% of issuance; net supply grew by 86,479 ETH in a month, roughly a million a year7. Since the Merge the supply is up 1.6 million ETH. Layer-1 fees run at about $213,000 a day7. The rollups that carry 87 times the mainnet's user operations pay the base layer about $4,600 a day in aggregate for the privilege15. Base alone had booked about $94 million of profit against $4.9 million paid to Ethereum by late 2025. The "ultrasound money" story required fees to flow to ETH. The scaling roadmap routed them to the L2s instead, and that was the design, not an accident.
The marginal buyer of 2025 is gone, or underwater. The US spot ETFs recorded their worst month ever in October, a net outflow of $1.61 billion, and were still bleeding into November with seven consecutive outflow days to 3 November; cumulative inflows have fallen to $12.1 billion510. BitMine, the largest holder, carries an average cost around $3,350 and trades at 0.47 times its net asset value6. That number ends the treasury-company flywheel: a company cannot issue stock at half of NAV to buy more ether without destroying its own shareholders, so the buyer that absorbed 4.9% of supply has stopped, and the market now has to ask what happens if it is ever forced to turn. The Ethereum Foundation itself sold 2,785 ETH on 27 October and cut its 2026 budget by about 40%16.
The roadmap slips, the people leave, the competitors do not wait. Glamsterdam, the upgrade that is supposed to lift the gas limit toward 200 million, has moved from the first half of 2026 to the third quarter to "Q4, date not confirmed"; its Hoodi testnet fork was postponed on 23 October after auditors flagged that its new state-pricing rules could break existing contracts1718. Both executive directors of the Foundation left in 2026, along with several senior researchers16. Meanwhile Solana runs 2.63 million daily active addresses to Ethereum's 496,000, Tron carries roughly three-quarters of stablecoin transfer volume, and Hyperliquid's ether perpetual has more open interest than its bitcoin one1413. The activity is real; it is increasingly happening somewhere ETH does not get paid.
The breakout failed. Three green months took the ratio from 0.0258 to 0.0321 and never reached the 0.035 that would have changed the regime. October's reversal, ether down 16% against bitcoin's 7%, is the shape of a failed breakout, and failed breakouts in a six-year downtrend tend to resolve the way the trend points2. The macro bid that would lift the higher-beta asset is absent: the Fed is hiking, ETF money is leaving, and in that tape beta cuts down, not up.
Ethereum's underperformance is structural, not cyclical. The chain won the settlement war and gave the proceeds away to its rollups; the token is left with inflation, a departed marginal buyer and a roadmap that keeps slipping. The economy on Ethereum is the strongest argument for the chain and, right now, the weakest argument for the coin.
Our view: ether trades at $1,500–1,700 by the end of Q1 2027, a retest of the June low. At the $60,000 we expect for Bitcoin over the same window, that is an ETH/BTC ratio of 0.025–0.028, a new cycle low beneath June's 0.0258. Conviction is moderate — about 60% — and we say why: the supply-sink argument is real, exchange balances are the lowest since 2020, and a float that thin can move violently on little money.
Our bet runs one way: down, and down against Bitcoin. We are not calling the end of Ethereum, and we are not betting against the chain's economy. If ether closes a month above $2,800 first, we were wrong — see below.
What would prove us wrong
One direction, one closing level, and the fundamentals that would hollow it out.
$2,800 is just above the September 2026 high. A month closing there says the ETF buyer came back or the macro turned, and the thesis is closed against us, whatever happens afterwards.
Any of these weakens the thesis while the price holds, and we will log it as it happens: ETH/BTC closing a week above 0.035, the bulls' own regime-change line; Glamsterdam activating on mainnet with the gas limit above 100 million; net ETH supply turning negative over any thirty-day window; or US spot ETH ETFs taking in more than $1 billion in each of two consecutive months. Each of those is the fee engine, the supply or the buyer coming back, and each one is a fact we said is missing.
Ether trading at $1,500–1,700 on major spot venues by 31 March 2027. If neither the target nor the invalidation resolves by then, the thesis is booked as it stands — unresolved and closed. It does not get extended.
When a condition triggers, we book the result and publish the piece. As always.
This is analysis, not investment advice. Do your own research. The thesis is not changed after the fact.