Will Ethereum be supported by these factors as ETHBTC may capitulate?

Ethereum prices are experiencing a downward trend compared to Bitcoin, but it is possible that ETH/BTC will increase in future sessions due to these three factors.

Will Ethereum Recover Against Bitcoin? Here’s What the Future Holds

Ethereum slips versus Bitcoin | Source: McKenna via X

It’s no secret that Bitcoin has been dominating the cryptocurrency market, leaving Ethereum (ETH) in its dust. But don’t count out ETH just yet. Crypto analyst Mckenna believes that a combination of protocol-related and regulatory factors could turn the tides in favor of Ethereum, leading to a much-needed rally.

Ethereum Under-performing Bitcoin: Will This Continue?

Looking at the weekly ETHBTC chart, it’s clear that Bitcoin has had the upper hand since August 2022. During this time, Bitcoin has gained 42% against ETH, leaving Ethereum bulls scratching their heads. But there’s a glimmer of hope on the horizon.

ETHBTC price trending downward on the daily chart | Source: ETHBTC on Binance, TradingView

Bitcoin is currently at a 2022 low against ETH, and the approval of a spot Bitcoin ETF by the United States Securities and Exchange Commission (SEC) could catapult Bitcoin’s position even further, drawing in billions of dollars in capital. This event could potentially have a positive impact on altcoins like Ethereum. While Ethereum has been struggling against Bitcoin, it has remained relatively stable against the USD.

These 2 Factors Might Support ETH

Despite Ethereum’s weakness compared to BTC, Mckenna believes that Ethereum has the potential to recover in the medium to long term. One of the key factors is Ethereum’s transition from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus system. PoW, the method employed by Bitcoin, has come under scrutiny for its energy-intensive nature, raising concerns about its environmental impact. Ethereum’s PoS system offers a more energy-efficient alternative, making it an attractive choice for investors who prioritize sustainability.

But that’s not all. The PoS system provides ETH stakers with a base yield, making it a safe haven investment option. With Ethereum being the second most valuable crypto network, boasting a market cap of over $276 billion, many see it as a secure asset.

Furthermore, Ethereum is set to become deflationary with the activation of EIP-1559 in August 2021. This system burns a portion of the gas fees, effectively reducing the supply of ETH. In the last week alone, over 17,600 ETH have been destroyed, making the circulating supply scarcer and potentially driving up the value of ETH.

More ETH taken out of circulation | Source: Ultra Sound Money

So, while Ethereum may be struggling against Bitcoin at the moment, there are promising factors that could help ETH recover and even outperform BTC in the long run.

Q&A

Q1: What is the potential impact of a spot Bitcoin ETF on altcoins? A: The approval of a spot Bitcoin ETF could have a positive impact on altcoins like Ethereum. It could draw in billions of dollars in capital, benefiting the entire cryptocurrency market.

Q2: How does Ethereum’s proof-of-stake system differ from Bitcoin’s proof-of-work? A: Ethereum’s proof-of-stake system is more energy-efficient compared to Bitcoin’s proof-of-work. It addresses the environmental concerns associated with the energy-intensive mining process used by Bitcoin.

Q3: What is EIP-1559, and how does it affect Ethereum’s supply? A: EIP-1559 is a system implemented by Ethereum that burns a portion of the gas fees, reducing the supply of ETH. This deflationary mechanism makes ETH scarcer and could potentially increase its value.

Future Outlook and Investment Strategies

Based on the analysis of the current market trends and Ethereum’s potential for recovery, it is advisable to consider Ethereum as a valuable asset for investment. The combination of the energy-efficient PoS system, the base yield for stakers, and the deflationary nature of ETH make it an attractive choice for long-term investors. However, as with any investment, it’s important to conduct thorough research and seek professional advice before making any decisions.

To learn more about the current state of the cryptocurrency market and the factors affecting Ethereum’s performance, check out the following resources:

  1. Grayscale’s GBTC Tops ETFs – Global Mega Bank Standard Chartered Releases Bullish Forecast For Spot Bitcoin ETFs
  2. Bitcoin Design Foundation Launches – Supporting the design of the Bitcoin ecosystem
  3. Bitcoin Price Breaks $45k – Days Ahead of Potential ETF Approval
  4. Bitcoin Rebounds to $44k – Spot Bitcoin ETF Approval Looks Increasingly Likely
  5. XRP Price Could Hit $220 With Gamma-Ray Burst – Crypto Analyst Predicts Potential XRP Price Surge

Remember, investments come with risks, and it’s essential to stay informed and make well-informed decisions based on reliable information.

Lastly, don’t forget to share this article with your crypto-savvy friends and followers on social media. Let’s spread the knowledge and spark engaging conversations about the future of Ethereum! 💪🚀

Feature Image Credit: Canva | Chart Source: TradingView

Tags: #bitcoin, #bitcoinprice, #ethbtc, #ethereum, #ethereumprice, #SpotBitcoinETF

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