Bitwise: Ethereum is currently in "one of the most severe undervalued areas in years"

Analysts from the crypto asset management company Bitwise stated in a report that Ethereum has reached "one of its most severe undervalued areas in years."

According to data from CoinGecko, as of the time of writing, the ETH/BTC exchange rate has fallen by 47% over the past 12 months. However, Andre Dragosch, Research Director at Bitwise Europe believes that Ethereum is fundamentally mispriced "relative to on-chain activity and adoption metrics."

The growing interest in artificial intelligence, Meme coins and tokenization of RWA are considered reasons for ETH's poor performance. The report states: "These areas benefit from lower transaction costs while Ethereum's often congested and expensive network is at a disadvantage."

Dragosch added that the rise of L2 scaling solutions have "dispersed activities across multiple ecosystems, limiting value directly captured by Ethereum’s base layer." Worse still, ETH is widely used as a trading pair throughout the crypto ecosystem which makes it susceptible to sustained downward pressure during price increases.

Furthermore, Bitwise pointed out historical data suggests that ETH may rebound in February since it has yielded positive returns relative to BTC seven times over eight years. (Decrypt)