In the first half of the year, Bitcoin and Ethereum have delivered investors four times more ROI than the S&P 500, with an average annualized ROI of +116%. This impressive performance has raised questions about which cryptocurrency will outperform the other in Q3.
Several factors may influence this, including the expected U.S. dollar interest rate cut, which could be a tailwind for cryptocurrencies, particularly Bitcoin, due to its deflationary tokenomics.
On the other hand, Ethereum has an advantage in the DeFi and DApps sector. Usage statistics for MetaMask, Oasis App, MakerDAO, and Uniswap continue to impress, with MetaMask announcing a 55% surge in users from 19 million to 30 million in just four months.
Institutional adoption is another factor, with Bitcoin holding a clear advantage going into Q3 2024. Hundreds of millions of dollars flow into and out of the Washington-regulated Bitcoin ETFs daily.
Lastly, Ethereum's upcoming Pectra upgrade, expected in early 2025, could be a bullish tailwind supporting ETH price in the medium term. However, Ethereum faces more competition than Bitcoin, which could impact its market share.
Overall, the race between BTC and ETH is set to be closely watched in the coming months.