Ethereum (ETH), despite its 60% increase over the past year, is still less than Bitcoin (BTC)'s 87% growth in 2024.
A new report from CME Group and Glassnode has revealed the factors behind this trend, including the approval of a Bitcoin spot ETF, competition from other blockchains, and lower risk appetite among investors. for ETH. However, the launch of a spot Ethereum ETF in the US could reverse this downtrend.
1. ETH/BTC ratio decreased amid cautious investor sentiment
Data from Cointelegraph Markets Pro and TradingView shows that Ethereum has experienced relatively deeper corrections in 2024, with the largest drop being 31% from March 12 to May 1. Meanwhile, Bitcoin only dropped 23% in the same period.
Overall, Ethereum's decline in the 2022-2024 cycle has been deeper than Bitcoin's, with the largest drop being -42%. Previous cycles have seen declines of over -65% in both the early and late stages of the macro bull market.
The Glassnode-CME Group report also notes that “the ETH/BTC ratio continues to decline” in the 2023-2024 cycle, suggesting that overall investor risk appetite remains low for the current cycle. The ETH/BTC ratio has been trending down since The Merge, marking a period where Bitcoin outperformed Ethereum, a scenario that is still playing out today.
2. Realized volatility and MVRV ratio of ETH is lower than BTC
The report analyzed the Market Value to Realized Value (MVRV) ratio to assess overall investor returns. The MVRV ratio tracks the difference between market capitalization and realized capitalization, describing the average unrealized profit or loss that the market holds.
Although the index has improved steadily since October 2023, its current value of around 1.8 is still well below the peaks of 6.2 and 3.8 during the 2017 bull cycles. and 2021.
Meanwhile, Bitcoin's MVRV ratio is around 2.5, suggesting that the average BTC investor holds larger unrealized profits than the ETH investor. This means that investors still value BTC more than ETH and they would rather invest in this pioneering cryptocurrency than Ether.
3. ETH futures trading volume is lower than BTC
According to a report by Glassnode and CME Group, the futures market remains the main source of trading volume in the digital asset market, often “5 to 10 times larger than spot trading volume.” ”.
Although Ethereum's open interest remains high in 2024, reaching an all-time high of $17.09 billion on May 29, derivatives trading volume remains significantly lower than that of Bitcoin.
High futures trading volume indicates investor confidence and enthusiasm, which can lead to more buying and higher prices. Trading volumes in the futures market have increased since October 2023, with Bitcoin seeing more than $34.4 billion in contracts traded daily compared to Ethereum's $26.7 billion.
Even though Ethereum underperformed Bitcoin, analysts remain optimistic that the Ethereum spot ETF will help ETH reach new highs. Some speculate that Wall Street will use it as a gamble on Web3 growth. Others predict that a spot Ethereum ETF could attract more than $15 billion in its first months, pushing the price of ETH to $10,000 this cycle.
