Lede
Ethereum’s native cryptocurrency, Ether (ETH), is exhibiting price action that closely mirrors the market cycle observed in 2019. Despite a prolonged period where the asset was characterized as “dead” due to a four-year downward trend against Bitcoin, recent technical data suggests a significant shift in market structure. The asset appears to have bottomed out in April 2025, marking a potential end to its long-term underperformance relative to the broader crypto market.
This bottoming process led to a notable recovery in the Ethereum-to-Bitcoin (ETH-BTC) ratio, which reached a local high of 0.043 in August 2025. This ratio is a critical metric for investors, as it tracks the relative strength of ETH against BTC. The movement observed since April indicates that the market may be transitioning out of a multi-year bearish phase and entering a period of stabilization that aligns with historical patterns seen six years prior.
Context
The underlying health of the Ethereum network is currently supported by a massive expansion in stablecoin liquidity. In 2025 alone, the stablecoin supply on the Ethereum blockchain grew by more than 65%. This surge has resulted in the total stablecoin supply doubling since the previous market peak recorded in 2021. Such growth indicates a substantial increase in the capital stored and utilized within the ecosystem, providing a foundation for decentralized finance and other on-chain activities.
Currently, the total stablecoin market capitalization on the Ethereum network exceeds $163.9 billion. A significant portion of this market is dominated by Tether’s USDt, which accounts for approximately 52% of the total stablecoin market cap on the platform. The utility of the network is further highlighted by transaction data from the end of the previous year; Ethereum processed approximately $8 trillion in stablecoin transfer volume during the fourth quarter of 2024, cementing its role as a primary settlement layer for digital assets.
Impact
The impact of these shifting dynamics is particularly relevant given the prevailing investor sentiment. For the past four years, ETH has been trending downwards against Bitcoin, leading many market participants to dismiss the asset’s future potential. However, the technical bottom established in April 2025 and the subsequent rally to 0.043 in the ETH-BTC ratio by August suggest that the “ETH is dead” narrative may be premature. The network’s ability to handle $8 trillion in transfers in a single quarter of 2024 demonstrates a level of utility that contrasts sharply with its price performance against Bitcoin.
The growth in stablecoin supply by over 65% in 2025 acts as a liquidity buffer, potentially reducing volatility and providing the necessary depth for larger capital inflows. As the supply has doubled since 2021, the network now holds more dollar-pegged value than ever before. This massive liquidity pool, largely comprised of USDt, suggests that even if the native asset’s price fluctuates, the network’s role as a financial infrastructure remains dominant and continues to expand regardless of the sentiment surrounding the ETH-BTC trading pair.
Outlook
Looking ahead, the continuation of the 2019 cycle mirror could signal a broader recovery for Ethereum. The fact that the stablecoin supply has increased by more than 65% in 2025 suggests that the network is better capitalized than in previous cycles. Analysts are monitoring whether the local high of 0.043 reached in August 2025 will serve as a new support level as the asset attempts to break its four-year downtrend against Bitcoin permanently.
With a total stablecoin market capitalization exceeding $163.9 billion and Tether maintaining a 52% dominance, the network is positioned as the primary hub for tokenized liquidity. The doubling of the stablecoin supply since the 2021 peak indicates a maturing ecosystem that is increasingly used for value transfer and settlement. If historical patterns from 2019 hold true, the current phase of bottoming and stabilization may precede a more sustained period of growth, supported by the record-high levels of on-chain liquidity and transfer volumes established over the past year.
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