Will Ethereum Continue to Underperform Bitcoin?
Since August 2022, Bitcoin has been outperforming Ethereum (ETH), gaining 42% against ETH. This trend has raised concerns about whether ETH will continue to lag behind BTC.
The Energy Efficiency Advantage of Ethereum
Ethereum’s switch from proof-of-work (PoW) to proof-of-stake (PoS) consensus systems is one factor that may support ETH in the future. PoS is more energy-efficient compared to PoW, which has faced criticism due to its environmental impact.
Ethereum as a Safe Haven
The PoS system in Ethereum offers stakers a base yield, making it a safe investment option. With a market cap of over $276 billion, Ethereum is considered the second most valuable crypto network, according to CoinMarketCap.
The Deflationary Nature of ETH
After the activation of EIP-1559 in August 2021, Ethereum will become deflationary. This system burns a portion of gas fees, reducing the circulating supply of ETH. In the past week alone, over 17,600 ETH have been destroyed, according to Ultra Sound Money.
Hot Take: Is Ethereum Set for a Recovery?
Despite underperforming Bitcoin recently, there are several factors that could contribute to a potential recovery for Ethereum. The energy efficiency advantage of PoS, the perception of Ethereum as a safe haven, and its deflationary nature all work in favor of ETH. Keep an eye on these factors as they may support a refreshing rally for Ethereum in the coming months.
Newt Bettec emerges as an intellectual voyager at the intersection of crypto analysis, meticulous research, and editorial mastery. Within the digital labyrinth of cryptocurrencies, Newt’s intellect traverses intricate corridors, resonating with seekers of diverse inclinations. His talent for unraveling complex threads of crypto intricacies seamlessly blends with his editorial finesse, transmuting intricacy into an engaging tapestry of understanding. A guiding star for both audacious explorers and curious neophytes journeying through the crypto galaxy, Newt’s insights forge a compass for insightful decision-making amidst the ever-evolving universe of digital assets. With the precision of a wordsmith, they craft a narrative that enriches the evolving chronicle of the crypto cosmos.