Bitcoin to be outperformed by Ethereum in 2024
Ethereum’s price has once again surpassed the $3,950 barrier on February 22, while Bitcoin’s rally struggles to gain momentum. Three important market metrics suggest that Ethereum could further extend its lead over Bitcoin in the coming weeks.
Historically, Ethereum (ETH) and Bitcoin (BTC) have been closely correlated, but in 2024, ETH seems to have gained the upper hand. By analyzing on-chain data trends and expert analysis, we can gain insights into which asset will come out on top as the year progresses.
In 2024, both Ethereum and Bitcoin 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 attempts to maintain steady support above the $4,000 milestone.
However, a closer look at the price charts reveals that ETH currently has the upper hand, outperforming BTC by 7% in terms of year-to-date performance.
To determine which asset offers better value for money in 2024, it is important to examine the market catalysts driving both assets.
For Ethereum, key themes in the ecosystem in Q1 2024 include ongoing ETH ETF filings, liquidity staking derivatives, the Eigen-layer re-staking, and the Dencun upgrade. On the other hand, 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 events have led to diverse changes in on-chain transaction trends and investment patterns, resulting in Ethereum’s price surpassing Bitcoin.
Here are three reasons why Ethereum’s price could outperform Bitcoin in 2024:
1. Retail investors are rallying behind ETH as institutions dominate BTC markets: The approval of 10 new Bitcoin ETFs by the US Securities and Exchange Commission (SEC) has attracted significant corporate institutional investors. However, this dominance has caused retail investors to shift their focus to Ethereum. The number of new holder addresses on the Ethereum network has significantly increased compared to Bitcoin, indicating a divergence in retail investor sentiment.
2. Bitcoin miners are trading bearish while Ethereum node validators remain bullish: The current trading disposition of Bitcoin miners and Ethereum node validators is another market catalyst. Bitcoin miners have been selling off their BTC holdings ahead of the halving event, potentially slowing down the price rally. In contrast, Ethereum node validators have been accumulating more coins, indicating a bullish sentiment.
3. Technical indicators highlight Ethereum’s path to $5,000: Ethereum is expected to experience greater retail market demand than Bitcoin and a decline in circulation supply due to rising staking deposits. These factors could propel Ethereum’s price to new all-time highs above $5,000.
In conclusion, Ethereum’s price has the potential to extend its lead over Bitcoin in the coming weeks. Retail investor preference, the trading disposition of miners and node validators, and technical indicators all suggest that Ethereum could outperform Bitcoin in 2024.
