Research Summary
The report discusses the recent underperformance of Ethereum (ETH) against Bitcoin (BTC), the reasons behind it, and the potential future performance of both cryptocurrencies. It also highlights the impact of the Spot Bitcoin ETF and the selling pressure from Celsius on Ethereum’s performance.
Key Takeaways
Ethereum’s Underperformance Against Bitcoin
- Ethereum’s Recent Struggles: The report notes that Ethereum has been underperforming against Bitcoin for several months. The ETH/BTC ratio recently hit a low of 0.048, a level not seen since April 2021. However, Ethereum has since bounced back, with the ETH/BTC ratio currently sitting at 0.053.
Bitcoin’s Outperformance
- Bitcoin’s Bull Run: Bitcoin has been outperforming Ethereum, a trend common during bear markets and early stages of bull markets. The report attributes this to the inflow of FIAT money into Bitcoin, the largest crypto asset, and the anticipation of the Spot Bitcoin ETF.
Impact of Celsius on Ethereum
- Celsius’ Selling Pressure: The lending and borrowing platform Celsius has been selling over $1 billion worth of Ethereum to pay back its customers, creating significant selling pressure on Ethereum. However, this pressure is expected to ease as Celsius nears the end of its asset liquidation.
Ethereum’s Future Prospects
- Upcoming Developments: Despite its recent struggles, the report remains bullish on Ethereum’s future. It notes that a Spot Ethereum ETF is likely on the horizon, which could shift investor focus from Bitcoin to Ethereum. Additionally, Ethereum’s fundamentals remain strong, with upcoming developments like Proto-Danksharding (EIP-4844) expected to lower fees on Ethereum L2s and attract more onchain activity.
Bitcoin ETF’s Impact
- ETF Anticipation: The report highlights the anticipation of the Spot Bitcoin ETF as a major factor driving Bitcoin’s recent performance. The ETF has been a focus for investors for several months, with many choosing Bitcoin over other assets to capitalize on this event.
Actionable Insights
- Monitor Ethereum’s Performance: Given the recent underperformance of Ethereum against Bitcoin, it would be prudent to closely monitor Ethereum’s performance, particularly in relation to the ETH/BTC ratio.
- Keep an Eye on Bitcoin ETF Developments: The Spot Bitcoin ETF has had a significant impact on Bitcoin’s performance. Any developments regarding the ETF should be closely followed as they could influence the performance of both Bitcoin and Ethereum.
- Consider Ethereum’s Future Prospects: Despite its recent struggles, Ethereum’s strong fundamentals and upcoming developments suggest potential for future growth. These factors should be taken into account when considering Ethereum.
