According to market intelligence firm Glassnode, Ethereum (ETH) has been falling behind Bitcoin (BTC) due to one main reason. Glassnode’s analysis reveals that Ethereum has not attracted the same level of increased capital from new buyers as Bitcoin has in the current market cycle, which is what propelled Bitcoin to achieve new all-time highs.
Glassnode analysts suggest that the approval of spot Bitcoin exchange-traded funds (ETFs) played a significant role in attracting short-term holders who purchased BTC in the last 155 days. They observed a noticeable increase in speculative activity leading up to Bitcoin’s all-time high on March 14th. Specifically, there has been capital accumulation among short-term holders, with the total USD wealth held within coins moved within the last six months reaching around $240 billion, which is close to all-time highs. However, this trend has not been replicated for ETH, which has yet to surpass its 2021 all-time high.
While Bitcoin’s short-term holder realized capitalization is nearly equivalent to the peak of the previous bull run, ETH’s short-term holder realized capitalization has barely risen from its lows. This suggests a significantly lackluster influx of new capital for Ethereum. The analysts believe that this lack of new capital inflows is a reflection of Ethereum’s underperformance relative to Bitcoin, likely due to the attention and accessibility brought about by spot Bitcoin ETFs.
The Realized Cap metric, which records the price at which each coin moved, is used to assess the number of holders who are in profit or at a loss.
Glassnode analysts propose that Ethereum could experience a significant capital inflow if the U.S. Securities and Exchange Commission (SEC) approves spot Ethereum ETF applications later this month. They state, “The market is still awaiting the SEC’s decision for approval of a suite of ETH ETFs expected towards the end of May.”
At the time of writing, Bitcoin is trading at $61,454, experiencing a decline of over 2.6% in the last 24 hours. Meanwhile, Ethereum is trading at $2,970, down more than 2.7% for the day.
Disclaimer: The opinions expressed in this article by Glassnode are not investment advice. Investors should conduct their own research before engaging in high-risk investments in Bitcoin, cryptocurrency, or digital assets. Please be aware that any transfers and trades you make are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend buying or selling any cryptocurrencies or digital assets, nor does it serve as an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
