The reasons why Ethereum (ETH) has risen more than Bitcoin (BTC) can be analyzed from multiple dimensions. Here are some historical and possible reasons in the future:
1. Ecosystem expansion and application: Ethereum is not just a digital currency, it is also a smart contract platform that supports decentralized applications (dApps), non-fungible tokens (NFTs) and various other innovations Financial product. With the explosive growth of the DeFi (decentralized finance) and NFT markets, the application activity of the Ethereum network has increased significantly, which increases the demand for ETH, thereby pushing up its price.
2. Technological development and upgrades: Ethereum has been undergoing a series of major technological updates, such as the "Ethereum 2.0" upgrade that transitions from proof of work (PoW) to proof of stake (PoS), which helps improve transaction efficiency, reduce energy consumption, and pave the way for greater scalability and sustainability in the future. These positive technical improvements have strengthened investors' confidence in the long-term value of ETH.
3. Institutional acceptance and adoption: More and more traditional financial institutions and enterprises have begun to explore the potential of Ethereum and launched financial products and services based on Ethereum, such as investment products, custody services, etc., which further drives the market demand for ETH.
4. Supply Economics: In certain periods, Ethereum’s actual circulating supply may decrease due to a potential destruction mechanism (for example, part of the gas fee is burned after the implementation of EIP-1559). While Bitcoin is halved every four years, which also limits supply, Ethereum’s economic model is more likely to be adjusted dynamically.
5. Market sentiment and speculation: Changes in investor sentiment are also an important factor affecting cryptocurrency price fluctuations. If the market generally believes that Ethereum will play a more important role in the field of blockchain technology or dominate the future digital economy, more funds may flow into ETH, pushing its price beyond BTC.
6. Relative valuation differences: As the market matures, investors may reassess the value of the two assets, believing that Ethereum has greater growth potential or is undervalued relative to its current market value, and therefore are willing to give it a higher premium.
It should be noted that market dynamics are constantly changing, and the importance of the above reasons may vary in different periods of time. In addition, the price of cryptocurrency markets is affected by a variety of complex factors, including but not limited to policies and regulations, macroeconomic environment and technological progress.
