It’s no secret that Bitcoin, Ethereum, and the crypto market experience volatility, which causes fluctuation in price. This is why crypto investors continue to monitor the market to avoid massive losses, especially during the bearish market.
However, the bear market is also a time for long-term investors to take advantage of the low prices and buy now. Then, sell these digital assets during the bullish run. Nevertheless, investors have had to deal with consecutive losses for the month.
Factors such as interest rate spikes and skyrocketing inflation have contributed in no small way to these massive losses. Yet, there are still some positive signs in the crypto market, with some crypto assets experiencing bullish runs recently.
Ethereum was one such crypto asset, with a gain of 9% in the last seven days. Ethereum’s performance is one reason the crypto market capitalization is back to the $1 trillion mark.
Factors Driving Ethereum’s Performance
The price gain of Ethereum started on October 26, when ETH gained 17%, while Bitcoin only added 6% during that time. Expert analysts have analyzed why that happened and explained why ETH performed better than Bitcoin.
Grayscale — an institutional assets manager, speculated that Ethereum’s recent performance might have been influenced by its supply level after the Merge. However, it wasn’t long before the ETH issuance dropped to about 14,000 ETH supplied daily after the Merge.
During this crypto winter, several BTC and ETH miners had to sell their assets to pay for expenses. Unlike BTC, the situation of Ethereum has significantly improved after it transitioned to proof-of-stake, which minimized its selling pressure. Grayscale’s latest market analysis report revealed that the drop in selling pressure opened the ETH price up to a positive increase.
Alongside, various on-chain data revealed that Ethereum’s supply growth is currently at 0.09% annually. As a result, Ethereum’s demand has recently increased, leading to the burning of more ETH. This led to a deflationary rise in ETH supply in the last few weeks, making ETH an attractive asset over the long term.
Furthermore, the energy consumption of Ethereum is now 99% lesser post-Merge, making ETH a more environmentally friendly asset. The Ethereum Energy Consumption data (the Digiconomist) stated that the network’s energy consumption dropped from 84 TW/h per year to 0.01 TW/h post-merge.
These factors have made Ethereum a better option for investors compared to BTC. For example, Ethereum gained 24% in the last months, compared to Bitcoin, which experienced a decline over the same period.
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