Ethereum vs Bitcoin: Why Ethereum’s Recent Price Surge Could Outpace Bitcoin
Ethereum vs Bitcoin – Ethereum, the second-largest cryptocurrency by market capitalization, has been facing significant challenges over the past few months, struggling to maintain momentum while Bitcoin soared to new all-time highs. However, Ethereum finally broke the $3,000 mark on Saturday, achieving a peak of $3,056 — its highest point since August 2.
This surge marked only the second time this year that Ethereum surpassed the $3,000 threshold, a stark contrast to the dip it experienced just before the U.S. presidential election. In the days leading up to the election, Ethereum had fallen as low as $2,375, but a change in market sentiment, particularly fueled by President-elect Donald Trump’s stance on digital assets, provided the tailwind that pushed the price upward.
Bitcoin Hits New Highs While Ethereum Follows Suit
Bitcoin, on the other hand, has been on an extraordinary run, repeatedly breaking its all-time price records. On Friday, Bitcoin surged once again, reaching a new peak of $77,231 — surpassing its previous high of $73,737, which was set back in March. This latest surge was sparked by Trump’s unexpected win in several battleground states, including Pennsylvania, which triggered a massive market rally.
While Bitcoin has been setting new records, Ethereum’s climb past $3,000 is particularly notable given its recent struggle to keep up with Bitcoin’s performance. Despite this, Ethereum has been steadily gaining ground, outperforming Bitcoin in the past week, with a 20% price increase compared to Bitcoin’s 10% gain.
Ethereum’s Market Dominance Growing Amid Regulatory Changes
While Ethereum’s decentralized finance (DeFi) ecosystem continues to be a dominant force in the crypto space, regulatory challenges have often placed a lid on its potential. Key players in the DeFi sector, such as Uniswap, have faced enforcement threats from the U.S. Securities and Exchange Commission (SEC) in 2024. This regulatory uncertainty has contributed to the volatility of Ethereum’s price, but the market may be entering a new phase.
With a Trump-led shift in leadership at the SEC likely, Ethereum’s outlook could improve significantly. According to Thomas Perfumo, Head of Strategy at Kraken, the new administration’s focus on addressing regulatory enforcement could be especially beneficial for Ethereum, particularly compared to Bitcoin, which is less closely tied to the broader DeFi sector.
Ethereum’s Governance Tokens See Strong Gains
The broader Ethereum ecosystem, including its governance tokens, has seen significant price increases. Aave’s governance token, which powers the decentralized crypto lending platform, has risen 29% in the past week, reaching $183. Similarly, Ethena, a decentralized stablecoin protocol, saw its governance token increase by 34%, reaching $0.50.
These price movements reflect growing optimism within the Ethereum community, with more attention being paid to its role in DeFi and the broader cryptocurrency market.
Ethereum ETF Momentum and Regulatory Developments
The approval of spot Ethereum ETFs earlier this year has been a pivotal moment for Ethereum. After a brief investigation by the SEC in March, which cast doubt on the approval process, the regulator officially approved Ethereum ETFs in May, validating Ethereum’s status as a commodity.
Despite a lackluster debut for Ethereum ETFs in July, recent market activity has been promising. In a major boost, Ethereum ETFs saw $80 million in inflows on Thursday, marking their third-best day since launch, according to CoinGlass data.
These inflows reflect a shift in investor sentiment, as regulatory concerns around Ethereum seem to be waning under the influence of the incoming Trump administration.
Dencun Upgrade Sparks Debate: A Mixed Blessing for Ethereum
One of the key topics among Ethereum investors and developers is the Dencun upgrade. This upgrade, which provided layer-2 networks with a dedicated space for posting transactions, made Ethereum’s networks more efficient and cheaper to use. However, some have raised concerns that the upgrade has made Ethereum’s overall supply inflationary, potentially undermining its long-term value.
Despite this, traders are maintaining strong bullish sentiment, with many speculating on further price gains in the short term. According to Nick Forster, founder of on-chain options DeFi protocol Derive, the overall market remains extremely optimistic. In fact, Ethereum is seeing even stronger bullish sentiment than Bitcoin, suggesting that the cryptocurrency may continue to rise over the coming weeks.
Bitcoin’s Market Dominance Continues to Outpace Ethereum
Despite Ethereum’s impressive performance, Bitcoin continues to dominate the market, both in terms of price and market capitalization. The surge to new highs has been driven by substantial investments in spot Bitcoin ETFs and increased market dominance. Bitcoin’s dominance in the market compared to Ethereum reached a three-year high in October, showcasing investor preference for the world’s largest cryptocurrency.
Although Bitcoin’s gains in 2024 have been remarkable, Ethereum remains the top choice for decentralized finance applications, and its price trajectory over the past week shows that it may be ready to outpace Bitcoin in the near future, especially if regulatory pressures continue to ease.
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