Bitcoin and ether are the blue chips of cryptocurrencies. Like tech giants Apple and Microsoft, they attract unique and loyal communities, leading to natural competition.
Bitcoin (BTC) and Ether (ETH) are also increasingly correlated. In fact, they are more parallel than ever.
But BTC still leads the market, controlling nearly half of the total cryptocurrency market capitalization and is also at a 12-month high. Even so, it is still lower than the 2018-2019 bear market, when Bitcoin dominance was as high as 71%.
At the same time, ETH accounted for nearly 20%, which is more than double that of when the market bottomed out in the previous cycle. A comparison of returns since April 2018 shows that Bitcoin has outperformed Ethereum for most of this period (until May 2021).
That’s when BTC started falling from $60,000, while ETH was correcting after trying to break above $4,000. At the time, BTC was up 550% since the last bear market, from $7,900 to nearly $51,000. ETH surpassed BTC with a gain of more than 700%.
Bitcoin and Ethereum over the last 5 years.Source: tie
For most of the entire bull market, ether was in the lead. Even so, Bitcoin has bounced back as the ETH/BTC ratio has fallen by 13.5% over the past year.
BTC is currently lagging behind ETH – which has been in the lead for the past 5 years – with a gain of 279% for BTC compared to 289% for ETH.
However, five-year returns can look completely different in three months.
Since the 2021 bull run, the narrative on Bitcoin and Ethereum has changed, explained Bob Ras, co-founder of crypto security startup Sologenic.
“There’s a lot of power behind the Ethereum ecosystem because of DeFi, NFTs, ENS, and all the other utilities it supports. During a bull market, there are a lot of users around various digital asset applications, so it makes sense for Ethereum to be the leader.”
Over the past three years, ETH has outperformed BTC (1.085% vs. 327%).Source: tie
Bitcoin is not doing as badly as Ethereum
Constrained by the recent US banking crisis, the macro picture has changed since the 2018 bull market.
Russ pointed out that the US Federal Reserve (Fed) will have to withdraw its tightening policy soon, which may inject more liquidity into the market to avoid a credit crunch.
“Bitcoin is currently competing with gold and other stores of value as a hedge against possible imminent liquidity injections, which will ultimately lead to a devaluation of the U.S. dollar. LA and other fiat currencies”.
“BTC is a solid, reliable asset right now. Of course, things could change again, but it looks like the ETH/BTC ratio is trending down for a while — maybe until the next bull run.”
BTC has easily outperformed ETH since April 2022, just a few weeks before Terra’s plunge caused market chaos. BTC is down nearly 26%, while ETH is down 37%.
Even so, it can be argued that Bitcoin has fared “less badly” than ETH. Bitcoin has outperformed Ethereum when scaling historical gains.
Bitcoin is up 4 billion percent since its earliest recorded price ($0.00076392) in late 2009. Meanwhile, Ether is up “only” 66.544% since its initial launch in 2015.
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According to Blockworks