Three factors driving Ethereum to outperform Bitcoin

The recent crypto bailout rally has seen a number of assets perform better, and ETH is one of them. Here are some possible reasons.

The crypto market has gained more than 9% over the past week, bringing the total capitalization back to the $1 trillion level once again.

Some crypto assets have performed better than others, and Ethereum has been more profitable than its big brother over the past seven days. During the rally that started on October 25th, Ethereum rallied 17% from current levels. However, Bitcoin only made 6% over the same period.

Institutional asset manager Grayscale stated that this could be related to Ethereum supply growth in a November 1 market report.

“From a fundamental perspective, ETH’s slowing supply growth after consolidation has been a partial driver of the better performance against BTC.”

Reduce sales pressure

Before Consolidation, Ethereum miners had to sell assets to cover their costs, just like Bitcoin miners. But since the network switched to proof-of-stake in mid-September, selling pressure has decreased significantly.

Grayscale noted: “Without the constraints of miner selling pressure, the price of ETH is now more likely to be positively impacted,” Grayscale noted.

Another aspect of Ethereum’s appeal is the reduced supply release. The report notes that since Consolidation, the second largest crypto issuance has dropped by about 14,000 ETH per day or less by about 5 million ETH per year.

According to tracking tool Ultrasound.Money, Ethereum supply growth is currently only 0.09% per year. This has turned to negative growth or deflation several times recently as network demand increases and more ETH is being burned than is being produced. This makes it, at least in theory, a very attractive long-term holding.

Furthermore, Consolidation has reduced energy consumption by 99.9%, making the property much more attractive to ESG (environmental, social and governance) conscious organizations and businesses. ).

According to Digiconomist’s Ethereum Energy Consumption Index, energy consumption has dropped from around 84 TW/h (terawatt hours) per year before Consolidation to just 0.01 TW/h today.

These three factors have made Ethereum a more promising prospect, which has been demonstrated in its recent performance against Bitcoin.

Ethereum Price Outlook

ETH price has increased 1% on the day to reach $1,585 at press time, according to CoinGecko. The asset hit its highest price since mid-September on October 29, touching $1,645, but it failed to move higher.

Ethereum is up 24% over the past month, but the shrinking shows that it is still as range-bound as it has been since May. ETH is currently down 67.6% from its November all-time high. 2021, also slightly better than Bitcoin’s drop.

Read more: Ethereum flashes a classic bullish pattern in its Bitcoin pair, hinting at 50% upside

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