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It’s no secret that Ethereum’s performance has been tame compared to Bitcoin since the start of this cycle. However, this trend became most apparent at the start of the year when ETH’s price fell toward the $3,000 mark while BTC continued to move sideways above $100,000.

When the Bitcoin price eventually lost the $100,000 level in the first quarter, the value of Ethereum had already fallen close to $2,000. While the premier cryptocurrency has reached a new all-time high in recent days, the “king of altcoins” faces significant resistance around $2,800.

Will Divergence Lead To Revaluation Of Investment Strategies?

The rate of both assets’ price growth in the past few weeks and months provides an insight into the declining relationship between Bitcoin and Ethereum. In a recent Quicktake post on the CryptoQuant platform, on-chain analyst Carmelo Aleman shared that a decoupling has occurred between the world’s two largest cryptocurrencies.

Aleman defined correlation in his post:

Correlation is a statistical measure of the relationship between two variables. In financial analysis, it helps determine whether two assets tend to move in the same direction (positive correlation), in opposite directions (negative correlation), or independently (near zero).

Historically, Bitcoin and Ethereum have always maintained a strong positive correlation — usually above 0.7. This long-term trend explains why most of BTC’s movements were often mirrored by the price of Ethereum over the past few years.

Source: CryptoQuant

Aleman, however, noted that a decoupling has occurred between the top two assets since start of this year. Data from the BTC-Alts Correlation Matrix (Yearly) shows that the correlation was 0.63 on January 1, 2025 before falling to 0.05 by May 22, 2025.

Source: CryptoQuant

From an investment perspective, this major divergence breaks one of the crypto market’s most consistent patterns, leading to a reevaluation of strategies based on Bitcoin-Ethereum correlation. “It also adds uncertainty for investors, who can no longer expect ETH to follow BTC,” Aleman added.

The on-chain analyst said:

Portfolio models, risk strategies, and return forecasts must now adapt. This may also reflect how Ethereum is becoming driven by its own internal factors—like protocol upgrades, regulation, or DeFi—indicating growing independence.

Aleman also mentioned that this shift means Ether and related assets are at an increased risk of missing out on bull markets. This effect is largely seen in 2025 where the Bitcoin price has climbed, while the value of ETH and other Ethereum-related altcoins has often stalled or declined.

Bitcoin And Ethereum Price

As of this writing, Bitcoin and Ethereum are valued at around $107,450 and $2,507, respectively. While the BTC price climbed by more than 5% this past week, ETH’s value is up by less than half of that in the same period.

The price of BTC against ETH on the daily timeframe | Source: BTCETH chart on TradingView

Featured image from iStock, chart from TradingView

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BitMEX founder Arthur Hayes says Bitcoin (BTC) will likely benefit from the ongoing trade war and a US-China decoupling.

In a new interview with the host of the Forward Guidance YouTube channel, Felix Jauvin, Hayes says governments around the world will likely have to print money to offset the impacts of the trade war, which has ignited massive Bitcoin rallies in the past.

“China’s not alone. It’s every major economy needs to print a bunch of money to basically cushion the effects of this attempted divorce, this decline in globalization. But at the end of the day, yeah, they’re going to print money – Bitcoin benefits.

Now the reciprocal of the current account deficit in the US is our financial account surplus. And so all these dollars that got earned, the trillions of dollars that got earned selling stuff to America, got recycled into Treasury bonds and stocks and Mag 7, all the big US tech stocks. So mathematically, if [US President Donald] Trump is serious about reducing the current account to zero, then foreigners have to sell stocks – period. It’s just math.

And then the question is, okay, well, can the US government survive financially if there’s a big decline in capital gains taxes because the market’s not going up? I don’t think so. Therefore, we get a printing money function and Bitcoin benefits. It finally decouples from tech because of the structural flows and what needs to happen from an affordability standpoint for the US government.”

While some in the crypto space suggest the market turmoil may prompt central banks to start accumulating Bitcoin to diversify their asset holdings, Hayes believes central banks will continue to turn to gold as a hedge, not the flagship crypto asset.

“I actually don’t think that they’re mentally prepared for that sort of leap. They understand gold. They’ve been trained in gold. They’ve read history books about gold.”

Bitcoin is trading for $94,832 at time of writing, up 1.2% in the last 24 hours.

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Bitcoin (BTC) outperformed most major tech stocks on April 3 and April 4 as markets reeled from steep losses across the so-called “Magnificent Seven” (MAG7).

Standard Chartered head of digital asset research Geoffrey Kendrick said Bitcoin’s relative resilience signals a growing role as a dual-purpose asset — part growth trade, part hedge against macro risks.

In an April 4 research note shared with CryptoSlate, Kendrick highlighted that all seven tech giants were in the red, with Nvidia, Google, and Meta falling nearly 8% or more.

In contrast, Bitcoin and Microsoft posted milder declines of around 3%, with Ethereum (ETH) also faring better than most of the MAG7.

Kendrick said:

“Strongest performers were MSFT and BTC. Same again so far today in BTC spot and tech futures.”

Tech proxy and broader hedge

Kendrick argued that Bitcoin’s strong performance compared to legacy markets in the current market indicates the divergence is not a one-off event.

Kendrick said Bitcoin “trades more like tech stocks than it does gold most of the time,” suggesting that BTC tends to rise and fall with risk-on assets. However, he emphasized that its utility goes beyond just speculative upside.

During moments of structural stress in traditional finance, such as the March 2023 collapse of Silicon Valley Bank, Bitcoin has acted as a hedge, providing investors with an alternative to banking sector exposure. Kendrick categorized this as Bitcoin’s usefulness as a “TradFi hedge.”

Kendrick believes a new use case is emerging: a hedge against “US isolation.” Though he didn’t define the term, it likely refers to increasing geopolitical decoupling, concerns over U.S. economic dominance, or rising de-dollarization narratives.

Kendrick further argued:

“Over the last 36 hours, I think we can also add ‘US isolation’ hedge to the list of Bitcoin uses.”

Critical resistance in sight

Looking ahead, Kendrick noted Bitcoin may be approaching an important technical breakout following the positive US labor market report on April 4.

According to Kendrick:

“A break back above the critical $85k level looks likely today, post payrolls. That opens up a move back to the $88.5k pre-tariff level from Wednesday (likely this weekend).”

He concluded that Bitcoin is proving to be “the best of tech,” benefiting when growth stocks rally while also offering defensive characteristics across multiple market regimes. He concluded his analysis with a simple message for long-term believers in Bitcoin:

“HODL.”

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