Should You Believe in Ethereum’s Potential to Outperform Bitcoin?
Despite the ongoing debate within the crypto community about Ethereum’s ability to surpass Bitcoin in market capitalization, Markus Thielen, head of research at 10x Research, remains doubtful. Thielen argues that Ethereum’s weak fundamentals and recent performance trends indicate that Bitcoin is likely to maintain its dominance in the crypto market.
Challenges Faced by Ethereum
While Bitcoin has solidified its reputation as “digital gold” and a hedge against inflation, Ethereum has faced several challenges that have hindered its growth:
- Bitcoin developers’ strategic decision to maintain a 1MB block size in 2017 reinforced its store of value identity, making it attractive during economic uncertainties.
- Ethereum’s journey has been marred by scaling issues despite its role in the 2020-2021 bull cycle with innovations like NFTs.
- The long-delayed Dencun Upgrade (EIP-4844) aimed to address high gas fees arrived three years after the scaling problems became apparent.
Decrease in Ethereum’s Dominance
Post-upgrade, Ethereum’s dominance in the crypto market decreased from 17.8% to 15.8%, and the ETH/BTC trading pair has been on a downtrend since September 2022.
Preference for Bitcoin Over Ethereum
Reflecting this disparity, institutions like Blackrock have shown a strong preference for Bitcoin over Ethereum, with limited investor interest in Ethereum ETFs compared to Bitcoin counterparts.
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