Ether’s Potential to Outperform Bitcoin in 2024
Ethereum’s native cryptocurrency, Ether, has the potential to outperform Bitcoin by 2024, according to the Head of Research at ETC Group. This reversal of Ether’s underperformance compared to Bitcoin will be driven by its technological advancements and its position as a leading smart contract platform.
The ETC Group researcher highlighted factors that could contribute to Ether’s price appreciation, including the introduction of the deflationary “burn mechanism” with Ethereum Improvement Proposal EIP-1559. This reduction in supply, combined with the attractiveness of staking yields, may enable Ether to surpass Bitcoin in terms of market performance.
Predicted ‘Mean Reversion’ for Ether in 2024
Historically, Ether has shown a tendency to “mean revert” in its relative performance against Bitcoin over a 12-month period. The ETC Group researcher expects Ether to return to its average relative performance against Bitcoin, except for 2023 when it underperformed. Similarly, Coinbase’s Crypto Market Outlook report predicts a mean reversion for Bitcoin’s performance compared to Ether in 2024.
However, the Coinbase report acknowledges that Ethereum’s softer fundamentals have been a constraint on significant price correction. Transaction revenues on the Ethereum network have declined by 29% compared to the same period in 2022, creating inconsistencies in on-chain activity and deflation of monthly Ether supply.
Hot Take: The Future of Ether and Bitcoin
In conclusion, while there are indications that Ether could potentially outperform Bitcoin in 2024 due to its technological advancements and deflationary mechanisms, there are also factors that suggest Bitcoin’s established role and stability may enable it to outperform Ether in the long term. The crypto market is dynamic and subject to various factors, making it essential for investors to closely monitor the performance of both cryptocurrencies to make informed decisions.
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