These key factors could push Ethereum to outplay Bitcoin

Bitcoin, Ethereum and the entire crypto market are often subject to price fluctuations. That is why crypto-investors must monitor the market movement closely to avoid heavy losses when prices are low. The crypto bear market can also be a time for long-term investors to take advantage of low prices and buy assets that they can sell during bull runs.

However, losses in recent months have been almost unbearable for investors as factors such as interest rate hikes and inflation escalated the problems. Nevertheless, the crypto market has registered some relief in the past week as some assets saw massive price gains.

Among the assets that performed well is Ethereum, having seen over 9% gains in the past seven days. Ethereum’s performance brought the total crypto market cap back to $1 trillion.

Three Factors Driving Ethereum Performance

The rally started on October 25th, with Ether gaining 17%, while BTC only managed to add 6% in the same time. Some analysis explained why Ethereum had such an outstanding performance over Bitcoin.

Grayscale, an institutional asset manager, said Ethereum’s supply level after the merger may have affected the asset’s performance. The ETH supply was so much before the merge. But ETH issuance dropped after the merger to about 14,000 ETH per day and less than 5 million per year.

Also, like BTC miners, Ethereum miners had to sell assets to cover expenses during the long crypto winter. However, the situation has improved after the proof-of-stake transition, which minimizes selling pressure. Grayscale November report revealed that the reduced selling pressure exposed the ETH price to more positive upward movements.

Ultrasound Money reported that Ethereum supply growth is now only 0.09% per year. The ETH supply went into deflationary growth many times in recent weeks. It happened when demand for the network’s ETH increased, causing more tokens to be burned than produced. Theoretically, ETH’s attractiveness as a long-term asset has increased.

Energy consumption rate and ether price outlook vs. Bitcoin

Moreso, Ethereum’s energy consumption was reduced by 99.9% after merging, making the asset more environmentally friendly. This has made ETH more attractive to environmentally, socially and governance-conscious institutions.

The Digiconomist Ethereum Energy Consumption Index revealed that energy consumption decreased from 84 TW/h per year to 0.01 TW/h after the merger. The listed factors made Ethereum a better prospect for investors than Bitcoin, reflecting its recent performance.

Ethereum is currently trading at $1,552. The price jumped to $1,645 on October 29, the highest since mid-September. But it didn’t move higher, and it’s still 67.6% down from its November 2021 record.

ETH increased by 24% in the last month, but still range as it has been since May. This figure is somewhat better than Bitcoin’s price decline.

Bitcoin fell more than 70% from its peak in November 2021. Bitcoin is currently trading at $20,300. Its market dominance is now 38.77%, and a total value of $393 billion.

Featured image from Pixabay and chart from TradingView.com