Why Does Ethereum Price "Rise with Bitcoin but Ignore Fundamentals"? Bitwise Reveals: 65% of Price Movement Determined by Bitcoin

Gate News Report, March 18 — Asset management firm Bitwise’s latest research indicates that Ethereum’s price movement is not primarily driven by its network fundamentals but mainly influenced by Bitcoin and the macro liquidity environment. Based on a model built from 406 weeks of data since 2018, the firm found that Bitcoin’s price explains about 65% of Ethereum’s volatility. When Bitcoin fluctuates by 1%, Ethereum tends to move in the same direction by approximately 0.99%, showing a clear “high beta alternative asset” characteristic.

From the funding environment perspective, loose monetary conditions are the second-largest driver, accounting for about 11% of price changes. When market liquidity is abundant and credit expands, Ethereum is more likely to rise; otherwise, it faces downward pressure. Additionally, ETF fund flows contribute about 10% to volatility, though their impact is relatively limited but persistent.

In contrast, on-chain fundamentals appear significantly weaker. Network usage indicators like active addresses explain only about 6% of price changes, and fee revenue has even been excluded from the model, indicating its influence on price is close to “noise.” Bitwise believes the current market tends to view Ethereum as a “networked commodity” rather than an asset with stable cash flows.

Despite Ethereum holding over $162 billion in stablecoins—more than half of the global total—and having approximately $15 billion in real-world assets (RWA), along with institutional participation through ETFs and CME futures, its price has still fallen about 62% from its all-time high. VanEck CEO Jan van Eck even called it “Wall Street’s token,” but market pricing logic has not yet shifted to fundamentals.

Data also shows that Ethereum’s network utilization is at a historically low percentile, while its price remains relatively high, reflecting a disconnect between valuation and actual usage. Until the current structure changes, Ethereum’s trend is likely to continue following Bitcoin’s volatility, with macro liquidity and capital flows remaining the main drivers of short-term price direction.