What is ETH/BTC?
ETH/BTC is a trading pair representing the price of Ethereum (ETH) in terms of Bitcoin (BTC).
It is a commonly used cryptocurrency trading pair, similar to how fiat currency pairs like USD/EUR represent the exchange rate between the US dollar and the euro.
How does ETH/BTC work?
An ETH/BTC trading pair shows the value of one cryptocurrency in terms of the other. It measures how much ETH is equivalent to 1 BTC and vice versa.
Other trading pairs involve different cryptocurrencies, but ETH/BTC is particularly popular and liquid because it reflects the relationship between two of the most valuable cryptocurrencies.
The trading pair is typically denoted as ETH/BTC, with BTC being the largest cryptocurrency by market capitalization and the de facto reserve currency in the crypto world.
Other trading pairs may use BTC as the denominator, such as SOL/BTC and BNB/BTC. Occasionally, the trading pair may be written in reverse as BTC/ETH.
Can you trade ETH/BTC?
ETH/BTC is a popular trading pair for cryptocurrency traders who prefer to stay within the crypto market.
Since the ETH/BTC ratio has historically fluctuated, it offers an opportunity to capture price movements without involving fiat currencies.
Traders can benefit from the relative performance of one currency against the other, whether in a bullish or bearish market.
This allows them to make potential profits even when prices are decreasing.
What is the ETH/BTC ratio?
Historically, the ETH/BTC ratio has mostly been below 0.1, indicating that 1 ETH is worth less than 0.1 BTC.
As the first cryptocurrency, Bitcoin is the base currency against which other crypto assets are valued.
The value of other cryptocurrencies is generally expressed relative to Bitcoin.
However, trading pairs use ETH or BNB as the base currency when the other asset belongs to the Ethereum or Binance Smart Chain ecosystem.
Several factors would need to occur for a new all-time high:
- Ethereum’s market capitalization would need to rise significantly, narrowing the gap between ETH and BTC in fiat terms. This could happen through substantial growth in ETH’s market cap, a relatively faster decline in BTC’s market cap, or a combination of both. In such a scenario, ETH/BTC would appreciate as 1 ETH becomes relatively more valuable in BTC terms.
- Bitcoin’s status as the de facto reserve cryptocurrency would likely need to change. While all cryptocurrencies are highly volatile, Bitcoin is considered the most stable due to its longest history and recognition as a digital commodity. Opinions on Ethereum’s classification vary. A paradigm shift where ETH/BTC rises and Ethereum overtakes Bitcoin in terms of market capitalization would require Ethereum to become the most capitalized cryptocurrency in dollar