There are three factors that push Ethereum to outperform Bitcoin

Cryptocurrency markets have surged more than 9% in the past week, bringing back total capital of over $1 trillion again.

Some crypto assets have outperformed others, with Ethereum gaining more than its older brother over the past seven days. During the rally, which began on October 25, Ethereum rose by 17% to current levels. However, Bitcoin managed to gain only 6% during the same period.

Institutional asset manager Grayscale said it could be linked to the growth in Ethereum supply in a November 1 market report.

“From a fundamentals perspective, ETH’s slow supply growth after the merger was part of the driving force behind BTC’s outperformance.”

Low sales pressure

Before the merger, Ethereum miners had to sell the asset to make ends meet, just as Bitcoin miners do. But since the network moved to proof-of-stake in mid-September, selling pressure has eased significantly.

Grayscale noted that “without limiting selling pressure from miners, ETH price is now likely to be more vulnerable to larger upward moves.”

Another aspect of Ethereum’s attraction is the drop in offer issuance. The report notes that since the merger, issuance of the second-largest cryptocurrency has fallen by about 14,000 ETH per day, or about 5 million less per year.

According to Ultrasound.Money tracker, Ethereum supply is currently growing at just 0.09% annually. This has turned negative or deflationary growth a few times lately with the network increasing demand and burning more ETH than it can produce. This makes it, in theory at least, a very attractive long-term asset.

In addition, the merger reduced energy consumption by 99.9%, making the asset more attractive to companies and organizations interested in environmental, social and corporate governance (ESG).

According to the Digiconomist Ethereum Energy Efficiency Index, power consumption has fallen from about 84 TWh (terawatt-hours) per year prior to the merger to just 0.01 TWh today.

These three factors have made Ethereum a more promising prospect, as proven in its recent performance compared to Bitcoin.

Ethereum Price Predictions

ETH price is up 1% on the day to $1,585 at the time of writing, according to CoinGecko. The asset reached its highest price since mid-September on October 29, gaining $1,645, but failed to rise.

The price of Ethereum is up 24% in the last month, but the minification shows that it is still range bound as it has been since May. ETH is currently down 67.6% from its high in November 2021, which is also slightly better than Bitcoin’s decline.

The Three Factors post that pushes Ethereum to outperform Bitcoin first appeared on CryptoPotato.

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