Bitcoin Outperforms Ethereum By 44% Since The Merge — Here Are The Key Factors

The
cryptocurrency
market
has
been
under
intense
bearish
pressure
in
recent
weeks,
with
several
large-cap
assets
including
Bitcoin
(BTC)
and
Ethereum
(ETH)
struggling
to
put
in
a
positive
shift.
The
past
week
was
particularly
drab
for
the
two
largest
cryptocurrencies,
as
they
posted
double-digit
losses
in
the
last
seven-day
period.

While
the
BTC
price
performance
has
cooled
off
in
the
past
two
quarters
of
2024,
the
flagship
cryptocurrency
is
still
outpacing
Ethereum
in
terms
of
market
action.
Although
some
of
this
can
be
attributed
to
ETH’s
own
underwhelming
performance
in
recent
weeks,
a
blockchain
analytics
company
has
offered
insight
into
the
dynamics
between
Bitcoin
and
Ethereum.

Here’s
Why
Bitcoin
Is
Outperforming
Ethereum:
CryptoQuant

In
its
latest
report,
CryptoQuant
discussed
the
performance
of
Ethereum
relative
to
Bitcoin
in
recent
years.
According
to
the
platform’s
data,
Ethereum
has
underperformed
Bitcoin
by
44%
since
The
Merge,
an
event
in
2022
that
saw
Ethereum
(formerly
a
Proof-of-Work
blockchain)
transition
into
a
Proof-of-Stake
(PoS)
network.

As
of
this
writing,
data
from
TradingView
shows
that
the
ETH/BTC
price
stands
at
around
$0.04122,
the
lowest
level
since
April
2021.
ETH’s
underwhelming
action
against
BTC
has
persisted
despite
the
recent
launch
of
spot
Ethereum
exchange-traded
funds
(ETFs)
in
the
United
States.
In
fact,
the
ETH/BTC
pair
is
down
by
18%
since
the
approval
of
the
funds.

Source: CryptoQuant

According
to
CryptoQuant,
Ethereum’s
sluggish
action
against
Bitcoin
can
be
associated
with
its
relatively
weaker
network
activity.
For
instance,
Ethereum’s
network
total
transaction
fees
have
been
on
a
sustained
decline
following
the
Dencun
upgrade.
Meanwhile,
the
relative
transaction
count
has
fallen
to
a
multi-year
low
of
11.

Furthermore,
the
supply
dynamics
have
not
been
particularly
favorable
to
Ethereum
compared
to
Bitcoin.
CryptoQuant
highlighted
that
the
total
Ether
supply
has
been
growing
consistently
since
early
April,
shortly
after
the
Dencun
upgrade.
Coincidentally,
Bitcoin
completed
its
fourth
halving
event
in
April,
seeing
miners’
rewards
slashed
from
12.5
BTC
to
6.25
BTC.

Moreover,
investors
have
shown
a
preference
for
Bitcoin
over
Ethereum.
This
fact
is
supported
by
the
decline
in
the
relative
spot
trading
volume
of
ETH
to
BTC,
which
has
dipped
from
1.6
(I.e.,
the
former’s
spot
trading
volume
was
1.6
times
greater
than
the
latter’s)
to
0.76
in
the
past
week.

What
Next?

Interestingly,
CryptoQuant
believes
that
Ethereum
could
continue
to
underperform
against
Bitcoin,
especially
as
it
is
still
above
undervaluation
territory.
According
to
the
analytics
firm,
ETH/BTC
would
need
to
fall
at
least
50%
from
its
current
level
to
reach
the
undervaluation
zone.
As
of
this
writing,
the
Bitcoin
price
stands
around
$53,700
while
Ethereum
is
valued
at
$2,213,
according
to
CoinGecko
data.

ETH struggles against BTC on the daily timeframe | Source: ETHBTC chart from TradingView

Featured
image
from
iStock,
chart
from
TradingView