Ethereum
Bitcoin vs Ethereum: How They Have Been Performing Since ETF Approval in January
- Ethereum has seen low capital inflows since January compared to Bitcoin.
- Long-term ETH holders continue to wait for a new all-time high.
Leading Altcoin Ethereum [ETH] underperformed compared to Bitcoin [BTC] since January, Glassnode has found in a new report.
According to the on-chain data provider, while BTC, aided in part by US spot exchange-traded funds (ETFs), has seen significant inflows since the start of the year, ETH has seen a decline in commercial activity.
ETH remains in the shadow of BTC
Following the approval of spot Bitcoin ETFs on January 10, Glassnode data shows a significant divergence in net unrealized profit/loss (NUPL) between BTC and ETH.
In its report, the on-chain analytics firm noted that this suggests BTC investors have since captured a greater share of profits compared to their ETH counterparts.
The NUPL metric determines whether holders of an asset experience unrealized gains or losses. It compares the average purchase price of all tokens held by investors to the current market price.
If the market price is higher, there is a net unrealized profit, while if it is lower, there is a net unrealized loss.
According to Glassnode, a significant threshold for NUPL is when the value exceeds 0.5. In effect, this signals that an asset’s unrealized profit is greater than 50% of its total market capitalization.
Glassnode said:
“Amid the hype and market rally surrounding (the) approval of spot Bitcoin ETFs, the unrealized profits of Bitcoin holders grew significantly faster than those of Ethereum investors. As a result, the Bitcoin NUPL metric surpassed 0.5 and entered the euphoria phase three months earlier than the equivalent metric for Ethereum.
Source: Glassnode
Additionally, ETH has yet to see a significant influx of new capital like BTC has since spot ETFs became tradable in the United States.
Glassnode assessed the cap realized by short-term holders for both coins and found that that of ETH remains low.
This suggests reduced activity from the coin’s short-term investors, whose actions are known to significantly influence an asset’s price action.
The report further stated:
“In many ways, this lack of new capital inflows reflects ETH’s underperformance relative to BTC. This is likely due in part to the attention and access garnered by spot Bitcoin ETFs.
On why this could happen, Glassnode added:
“The market is still awaiting the SEC’s decision regarding approval of a suite of ETH ETFs expected towards the end of May.”
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Due to the difference in coin performance, long-term holders (LTH) of BTC and ETH have adopted different strategies.
While BTC’s LTH shed some of its holdings to take profits after the coin’s rally to a new all-time high, ETH’s LTH –
“It seems we are still waiting for better profit-taking opportunities.”