Will Ethereum Catch Up With Bitcoin?
When two correlated assets diverge, there is a simple call to make. The assets will remain divergent, possibly even further diverge, or they will recover at some point in the future. You can use these relationships to try to profit from revisions, or even use long-short strategies to stay market neutral.
Most people expect past value ratios to resynchronize, but this doesn’t necessarily happen. Gold vs. silver is a great example.
Throughout history, gold has been 5x, 10x, 20x, and even 80x as expensive as silver today.
I invest in crypto through Ethereum because historically it has been around longer and more persistent than Bitcoin, but as of now, it has underperformed.
If you wanted to explain this, you might say that Ethereum developers are constantly tinkering with the blockchain, regularly injecting their new ideas into the system, which may or may not fix the blockchain issues they want to fix, and that this tinkering reduces the value of Ethereum because it injects uncertainty.
If Bitcoin achieves its next long-awaited rally, then Ethereum will follow suit and will most likely catch up to Bitcoin in percentage terms, and may even continue to rise, as it did during the last cryptocurrency rally in 2021. One investor who is "all-in" on Ethereum also believes that Ethereum will replace Bitcoin in the future, which could mean a price of $25,000 for Ethereum if Bitcoin exceeds $100,000.
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I am not an avid Ethereum enthusiast, but you can understand my reasoning, no matter how optimistic it is. If Bitcoin breaks through $100,000 again, the price of Ethereum can easily reach $8,000.
