Key Points:
- Bitcoin (BTC) and Ethereum (ETH) make up over 61% of the total market capitalization of all cryptocurrencies.
- ETH tends to climb more when BTC rises, and vice versa.
- The volatility of the ETH-BTC exchange rate is lower than that of BTC or ETH alone.
- ETH-BTC has a modest but persistent positive correlation with the tech-heavy Nasdaq 100.
- ETH’s market capitalization is $224 billion, while BTC’s is substantially higher at $550 billion.
- ETH switched to a less energy-intensive proof of stake (PoS) system in 2022, while BTC uses an energy-intensive proof of work (PoW) system.
- The total supply of ETH is theoretically unlimited, while the maximum supply of Bitcoin is 21 million coins.
- The creation of new ETH coins has decreased since the implementation of the PoS system.
- At the next halving event in April 2024, the BTC supply is expected to be halved.
- BTC’s previous halvings were followed by significant price runups and bear markets.
- If BTC rallies ahead of its upcoming halving, it may also help ETH prices rise.
- The Ether-Bitcoin price nexus is influenced by supply mechanisms, correlation with technology stocks and the USD, and macroeconomic factors.
Hot Take:
The connection between Bitcoin and Ethereum is strong, with their prices and volatility often moving in sync. However, their distinct applications, market supply methodologies, and correlation with other assets play a vital role in their price dynamics. As the crypto landscape continues to evolve, it will be crucial to monitor these factors to better understand the Ether-Bitcoin price nexus.
By
By
By
By