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Ethereum is still outperforming Bitcoin – ETF who?

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Ethereum is still outperforming Bitcoin - ETF who?

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In this post:

  • Ethereum skyrocketed with a 98% yearly and 42% year-to-date increase, outshining Bitcoin (BTC).
  • Its supply is deflationary, a significant fact since the switch to a proof-of-stake model in September 2022.
  • A mere 11% of ETH is available on exchanges, hitting an all-time low, indicating a trend of ETH being locked up in staking pools, DeFi contracts, and layer-2 networks.

Ethereum is kicking Bitcoin’s butt, and not by a small margin. We’re talking a whopping 98% yearly gain, with a 42% increase just this year. Everyone’s buzzing about whether some shiny new ETF will hit the scene, but according to the folks over at Bernstein, that’s not even what’s fueling this fire.

So, what’s the secret sauce? It’s all about Ethereum’s move to proof-of-stake back in September 2022. This wasn’t just a tiny tweak. It was a game changer. The supply of ETH is deflationary. That means there’s less of it going around, which is a big deal, but apparently, not everyone’s got the memo.

Now, onto the juicy part about ETH being stashed away like a squirrel’s nuts before winter. Only 11% of it is chilling on exchanges, hitting an all-time low. The rest? It’s tied up in staking pools, DeFi contracts, and layer-2 networks. More ETH stashed away means less in circulation, driving demand through the roof.

Speaking of demand, let’s talk fees. They’re skyrocketing because everyone and their mom are doing more with ETH, from DeFi to NFTs. This uptick in blockchain hype is making folks lock up their ETH to get a piece of the action. The more ETH locked up, the less there is floating around, pushing its value up even further.

Layer 2 networks are also getting a shoutout here. They’re making Ethereum faster and cheaper, and with the DeFi scene getting a boost, ETH’s value is just ballooning. There’s also this thing called the Eigen layer, making it easier for people to restake their ETH and dive into new services. It’s like ETH is throwing its own party, and everyone wants an invite.

Bernstein is also eyeing the Dencun upgrade like it’s the next big blockbuster. They’re betting this will slash Ethereum layer 2 transaction costs by 90%, making ETH even more attractive. It’s like Ethereum’s gearing up to break the internet, driving more traffic and value to its ecosystem.

Then there’s the institutional investors, the big guns. They’re loading up on ETH, outpacing their bets on BTC. According to some Bybit research, institutions have 80% of their crypto portfolios in BTC and ETH, with a hefty lean towards ETH. This is a switch from retail investors who are spreading their bets across the board, including altcoins.

The chatter around town, courtesy of Bybit and Bernstein, is that ETH is the golden child because of its booming DeFi scene, layer-2 networks, and the much-anticipated Dencun upgrade. This marks a shift from just a few months back when everyone was all in on BTC, waiting for that ETF approval.

To wrap this up, ETH is not just outperforming BTC; it’s setting the stage for what could be the future of crypto. With its price at $3,221 and climbing, Ethereum is proving that yeah, this is gonna its year.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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