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Ethereum outperformed Bitcoin despite BTC Halving Hopes
Seven months after the Bitcoin network halved its miner rewards, BTC continues to trail ETH pricesover the same period, adding 200% versus 300% even without “halving” tailwinds in Ethereum. According to Joe Weisenthal, this goes on to prove that the halving thesis has failed even analysts assert that this year’s BTC price rally had factored in the early May 2020 event.
Details:
From historical performances, often Bitcoin prices rise a few months before halving only for the coin’s price to contract before rallying to new highs within a year and a half. In early May, the Bitcoin network halved their miner rewards. Before that, the coin soared, only contracting slightly in the few weeks after halving, before spiking to 2020 highs. Meanwhile, in anticipation of a smooth transition and activation of Eth2, ETH prices rallied, outperforming BTC in the last seven months when it added 300 percent versus 200 percent in Bitcoin. Despite the comparisons, the two diverge in terms of use case and are driven by different fundamentals as Bitcoin evolves into a store of value and the latter, a world computing seeking to resolve scalability challenges.
Impact on the ETH Price:
Neutral. Ethereum’s users are different from Bitcoin’s and the comparison, though good for portfolio holders, isn’t representative and doesn’t satisfactorily capture the drivers of each of the network’s valuation. Bitcoin is, for instance, deflationary, while Ethereum is inflationary with a budget set aside for its developers. This is just one of the many differences.
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