5 Reasons Why Ethereum (ETH) Is Much Stronger Than Bitcoin (BTC) Right Now
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Ethereum's price performance certainly raises some serious questions, as the second-biggest cryptocurrency on the market is clearly losing momentum and is unlikely to gain enough traction for a bounce right now. But fundamentally, it has at least five reasons to recover sooner than expected.
Mt. Gox does not have any ETH
The imminent risk of a massive sell-off from Mt. Gox is one of the major factors weighing on Bitcoin. The trustee of the defunct exchange is scheduled to return a sizable portion of Bitcoin to creditors, which may intensify selling pressure. Due to this, Ethereum has a clear advantage over BTC, which might enter the market and lower its price.
German government not selling Ethereum
Selling pressure on the market has been exacerbated by reports that the German government has been selling off the Bitcoin that has been seized. The recent difficulties of Bitcoin are partly attributable to this action.
On Ethereum, there is no miner sell pressure
Since the release of Ethereum 2.0, the proof-of-stake (PoS) consensus mechanism has replaced the proof-of-work (PoW) method. That implies that miners for Ethereum will no longer have to sell a lot of ETH in order to pay for their overhead. Nevertheless, in order to cover their costs for things like electricity, Bitcoin miners must constantly sell their Bitcoin.
Alex DovbnyaETH will also get an ETF
Ethereum, though not officially confirmed yet, is headed toward becoming its own exchange-traded fund, much like Bitcoin. Institutional investors could be exposed to Ethereum through an exchange-traded fund without having to physically hold the asset, which could raise demand.
Greater supply shock on ETH
The introduction of a burning mechanism for transaction fees through EIP-1559 has resulted in a significant reduction in the supply of Ethereum. A supply shock could occur for the asset as a result of this mechanism, which lowers the total supply of ETH.
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Alex Dovbnya
Vladislav Sopov
Dan Burgin
U.Today Editorial Team