The introduction of spot Bitcoin ETFs has not lived up to expectations. Despite significant capital flowing into these ETFs, the price of Bitcoin experienced a decline of over 5% following their approvals. In contrast, Ethereum saw an almost 8% rise over the same period, indicating its growing strength in the market.
According to on-chain analytic firm Santiment, Ethereum’s market dominance over Bitcoin has been steadily increasing. Over the past week alone, this dominance saw a notable increase of more than 22.4%. The popularity of the Ethereum network is evident in the average generation of 89.4k new Ethereum addresses daily. On January 16th, 96.3k wallets were created, further emphasizing its appeal.
The planned upgrades to the Ethereum network, starting with the Dencun hard fork, are among the key drivers of Ether’s appeal and the formation of a bullish perspective among investors. These events provide an opportunity for Ethereum to potentially decouple from the rest of the crypto market.
An analysis by QCP Capital revealed that Bitcoin forwards have plunged deeper than Ether forwards. The 1-month forward rate for Bitcoin decreased by 23%, while the 1-month forward rate for Ether decreased by 16%. Despite the decrease, ETH forwards still remain attractive, paying 11-13% annually. Selling ETH 1m 2200 Puts is also a viable option with yields above 21% annually, presenting a decent entry point if there is a dip in the potential ETH spot ETF approvals.
Looking ahead, significant events such as the Bitcoin halving in mid-April and the potential approval of spot Ethereum ETFs starting in May will play a crucial role in shaping the market. However, it is important to note that macroeconomic events can also greatly influence the direction of the market in the interim.
The Declining Supply of Ether
The supply of Ether on crypto exchanges has been steadily declining, dropping from 8.18% to 8.10% over the last ten days. This trend indicates that Ether holders are moving their holdings from exchanges to long-term storage in anticipation of a price rise. Currently, the supply of Ether on exchanges is nearing an all-time low of 8.05%, further supporting the bullish outlook for the cryptocurrency.
Ethereum has emerged as a dominant force in the crypto market, surpassing Bitcoin in terms of market dominance and price performance. With planned network upgrades and upcoming events, the appeal of Ethereum continues to grow, attracting investors and driving its decoupling from the rest of the market. The declining supply of Ether further reinforces the positive sentiment surrounding the cryptocurrency. As we look ahead to future developments, the rise of Ethereum shows no signs of slowing down, solidifying its position as a leading digital asset.