In this bull market, Bitcoin's gains far exceed those of Ethereum. So far, BTC has gained 133% year-to-date, while ETH has only gained 50%. Some in the community have jokingly remarked: 'When BTC was priced at $52000, ETH was breaking through $3300; when BTC was priced at $72000, ETH was still breaking through $3300; now BTC is breaking through $10000, and ETH has finally broken through $3300.'
Apart from BTC, the prices of public chain tokens known as 'Ethereum killers' have also exceeded ETH's gains. In the past month, SUI has risen by 74%, SOL by 50%, and DOT by 131%. Although ETH's price reached $3500 last Saturday, some investors still feel that the prospect of it reaching $4000 in this bull market is slim.
Due to the value proposition of being a 'stable currency', ETH is facing serious upward resistance, and Ethereum is turning toward inflation, as nearly all DeFi trades are executed on L2, which is significantly dragging down ETH's price.
So, as the second largest blockchain in the crypto industry, will Ethereum's performance in this cycle really lag behind BTC and other 'Ethereum killers' as many say? It may be too early to draw conclusions, Ethereum might be building momentum for a 'counterattack', and breaking through $4000 is just around the corner.
ETH/BTC exchange rate has shifted again
From a technical analysis perspective, the price ratio between ETH and BTC is at a cyclical turning point and has formed a bottom. Based on past experiences, this suggests that the price of Ethereum may rise soon, potentially exceeding Bitcoin's gains.
The chart shows the rise of ETH when the ETH/BTC exchange rate was low four years ago.
Institutional support for Ethereum
In addition to the rise in monthly net inflows of Ethereum ETFs and Ether futures trading volume in November, institutional investors have shown high confidence in ETH. Institutional investors are not just holding ETH for the short term; they are also locking it in staking contracts, which not only protects the network and serves as an additional means of earning returns but also indicates that institutional investors are very confident in Ethereum and its long-term growth prospects.
The number of Ethereum stakers has increased by more than 30% in the past 12 months. Blockchain intelligence firm Blockworks Research released a survey targeting Ethereum users in mid-October, which showed that 69.2% of respondents stake Ethereum, and among them, 78.8% are investment firms or asset management companies.
Moreover, institutional investors are taking other measures to maintain their liquidity while staking ETH, as reports indicate that over 52% of respondents are participating in liquid staking. This shows that these traditional financial participants are becoming increasingly mature in Ethereum's DeFi ecosystem.
Since Trump's victory, Ethereum ETFs have emerged from the abyss of capital outflow, finally welcoming fresh air and net inflows. Data shows that the cumulative capital flow of Ethereum ETFs has turned positive, indicating that institutional investors' confidence in Ethereum is continuously growing.
DAPP transaction volume has grown within the month
Another fundamental analysis of Ethereum's price is the monthly active usage of DApps protected by its blockchain network, Web3. As the ETH/BTC exchange rate reaches a historical turning point and ETF investor sentiment shifts to bullish, Ethereum's DApp transaction volume is increasing, and it nearly coincides with the calendar span of rising ETH futures trading volume and ETF inflows.
In the past 30 days, Ethereum's DApp transaction volume has far outpaced that of DeFi tokens. Ethereum's decentralized application layer transaction volume is $150 billion, far exceeding the $32 billion of the second-ranked Arbitrum (ARB) and the $26 billion of the third-ranked BSC (BNB).
At the same time, driven by ETF fund inflows, Bitcoin's rise, and bullish sentiment after the election, Ethereum's daily on-chain transaction volume surged to $7.13 billion, reaching its highest level of the year, increasing by 85% in just two weeks.
By the end of this macro market cycle, ETH will outperform Bitcoin. In the coming months, Ethereum will rise to $6000.
Each market cycle goes through a stage where Ethereum outperforms Bitcoin, which has not yet occurred in the current cycle but is certainly about to happen. Since ETH is still lagging, there is an opportunity to buy before it outperforms the market.
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