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As the battle for supremacy between Bitcoin (BTC) and Ethereum (ETH) continues to dominate discussions within the crypto community, a new element is changing the game. Analyst Leon WAIDMANN of the Onchain Foundation revealed that Ethereum could have more growth potential than Bitcoin in the context of the shift to spot ETFs (Exchange-Traded Funds). This analysis is based on product data from Grayscale, a cryptocurrency management leader that recently converted its trusts to ETFs.
Ethereum vs Bitcoin: Dynamics in favor of ETH
Since the conversion of Grayscale’s investment products into ETFs, Ethereum seems to be on a more promising trajectory than Bitcoin. Leon WAIDMANN, head of research at the Onchain Foundation, states that “during the first 50 days of monitoring the flow, Ethereum loses liquidity much more slowly than its counterpart Bitcoin”. This observation is based on ETF outflow analysis where ETH shows better resilience. So while Bitcoin-based products experience more drawdowns, Ethereum-based products show much more limited losses.
This data is key because it illustrates a change in the dynamics of institutional investors. According to WAIDMANN, this outperformance of Ethereum could pave the way for more significant “growth potential” if the observed trend continues. This perspective comes as the two cryptocurrencies, while market leaders, see their trajectories diverge following the introduction of ETFs in the United States.
Bitcoin influx and mixed signals for Ethereum
At the same time, Bitcoin is also showing signs of robustness. Bitcoin ETFs have seen positive inflows over the past seven days, with more than $1.35 billion in assets under management over the past week, according to some data. “Yesterday we witnessed the most productive day for Bitcoin ETFs since mid-July, with almost $0.5 billion added in a single day,” emphasizes Léon WAIDMANN.
For Ethereum, however, the signals are more mixed. Although ETH saw five positive days during the past week, it also saw two days of net outflow. Total inflows into Ethereum during this period were $93.2 million, which is a far cry from the positive numbers for Bitcoin. This volatility shows that despite strong fundamentals, Ethereum’s volatility could dampen investor enthusiasm in the short term.
The competition between Bitcoin and Ethereum to attract investment flows seems to be intensifying as each asset presents its own advantages and challenges. While Ethereum appears to have more growth potential due to improved liquidity resilience, Bitcoin continues to attract huge volumes of investment and consolidate its position as the benchmark asset.
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A graduate of Sciences Po Toulouse and holder of the blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I made a commitment to raise awareness and inform the general public about this ever-evolving ecosystem. My goal is to enable everyone to better understand blockchain and take advantage of the opportunities it offers. Every day I try to provide an objective analysis of current events, decipher market trends, convey the latest technological innovations and put into perspective the economic and social problems of this ongoing revolution.
DISCLAIMER OF LIABILITY
The comments and opinions expressed in this article are solely those of the author and should not be considered investment advice. Before making any investment decision, do your own research.