Ethereum price broke above $3,9500 barrier again on Feb. 22, while Bitcoin price rally struggles for momentum: 3 vital market metrics suggest ETH could further extend its lead over BTC in the weeks ahead.
Ethereum (ETH) and Bitcoin (BTC) are historically closely correlated, but in 2024, ETH seems to have gained the upper hand. A deep dive into the on-chain data trends and expert analysis provides key insights into which asset would come out on top as the year unfolds.
Is Ethereum better than Bitcoin in 2024?
So far in 2024, Ethereum and Bitcoin, the two largest assets in the crypto sector have attracted billions of dollars in capital inflows. As of March 2024, BTC is trading at historic all-time highs of $71,200, while ETH price attempts to establish a steady support above the $4,000 milestone.
However, a closer look at the price charts shows that ETH currently has the upper hand having outperformed BTC by 7% in terms of year-to-date performance.
The chart above shows that ETH price has increased 79% between Jan 1 and March 11 2024, which is significantly higher than Bitcoin’s 72% price gains.
However, while ETH currently has the upperhand, to determine which asset is a better value for money in 2024, it is important to examine the market catalyst driving both assets.
First, it is important to note that both assets are driven by separate narratives and market catalysts in 2024.
For Ethereum, the ongoing ETH ETF filings, liquidity staking derivatives, the Eigen-layer re-staking and Dencun upgrade have emerged major themes within the ecosystem in Q1 2024. Meanwhile, the dominant themes for Bitcoin are the rapidly growing demand from the 10 newly-approved BTC ETFs and the upcoming halving event scheduled for April 19 2024.
These key events have triggered diverse changes in on-chain transaction trends and investment patterns across both ecosystems, leading to Ethereum price outpacing Bitcoin.
3 reasons Ethereum price could outperform Bitcoin in 2024
- Retail investors are rallying behind ETH as Institutions dominate BTC markets
The US Securities and Exchange Commission (SEC) approved 10 new Bitcoin ETFs on Jan 11 2024 marking a real milestone moment for the cryptocurrency sector. Within the 2 months post-launch the ETFs have rapidly acquired about 800,000 BTC, about 4.2% of the total supply in circulation.
Evidently, Bitcoin price has benefited immensely from record-breaking inflows made by the corporate institutional investors in 2024. But interestingly, the ETF’s dominance has triggered a skittish reaction among BTC retail investors, much to the apparent advancement of the Ethereum ecosystem growth.
Santiment’s total holders metric estimates the total number of active or funded wallet addresses that currently exist on a blockchain network. It serves a proxy for measuring the level of adoption among retail investors and the mass markets.
In the last 50-days dating back to Jan. 21, the Ethereum network has attracted 3.59 million new holder addresses, while 200,000 BTC addresses emptied their wallets and exited the network.
This rare on-chain trend suggests that the retail mass markets are overwhelming behind Bitcoin. As Bitcoin becomes more concentrated in the hands of fewer whale investors and corporate entities, it puts BTC price at risk of market manipulation and external shock from the macroeconomic fronts.
The significant increase in new holder addresses on the Ethereum network compared to the number of BTC addresses emptying their wallets suggests a divergence in retail investor sentiment between the two cryptocurrencies.
Firstly, this trend indicates that retail investors are increasingly favoring Ethereum over Bitcoin, potentially due to Ethereum’s promise of profit-optimization and passive income from its low-risk staking yield to its retinue of decentralized finance applications (DApps).
Furthermore, the growing dominance of institutional investors and corporate entities in the Bitcoin market introduces a new layer of uncertainty and potential risk. While institutional adoption has been a key driver of Bitcoin’s recent price rally, it also increases the susceptibility of the market to large-scale sell-offs or coordinated trading strategies by these influential players.
In the event of a tradfi market downturn or macroeconomic policy changes, the concentrated ownership of Bitcoin in the hands of highly-sensitive Wall Street players could exacerbate BTC price declines and lead to heightened market volatility.
- Bitcoin Miners Trading Bearish while Ethereum Node Validators remain bullish
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