Ethereum ETH/USD has underperformed relative to Bitcoin BTC/USD in the ongoing cycle, with the listing of Bitcoin spot ETFs proving to be the difference.
What Happened: Bitcoin broke past its all-time high last month, spurred by significant demand for new investment vehicles that track its spot price. The King Coin was up 47% on a year-to-date basis, according to Benzinga Pro.
However, this pattern did not hold for Ethereum, which failed to go anyway near its 2021 peak this cycle. Its year-to-date gains have been comparatively mild at 32%.
According to on-chain analytics firm Glassnode, Bitcoin's Short-Term Holders Realized Cap was almost on par with the last bull run peak. On the other hand, Ethereum's STH-Realized Cap was less than half of the previous cycle.
Put simply, short-term holders, or newer market entrants, have shown far greater interest in Bitcoin, while new capital inflows into Ethereum have been lackluster.
Why It Matters: The launch of new spot Bitcoin ETFs made investing in cryptocurrencies easier, providing greater access to newer market participants, Glassnode noted.
Ethereum, on the other hand, was still in a wait-and-watch mode with a decision regarding its spot ETFs due to come later this month.
British multinational bank Standard Chartered which had initially forecasted approval by May, reversed its stance last month, Bloomberg ETF analyst Eric Balchunas too echoed the pessimistic statement last month
Ethereum's status has become the major sticking point, with the SEC allegedly launching a covert operation to brand the cryptocurrency as a security.
If Ethereum is officially declared a security, it could adversely impact sentiment and investments around the coin, resulting in a potential price crash.
Price Action: Ethereum was exchanging hands at $3,015.99 at the time of writing, dropping by 1.56% in the last 24 hours, according to data from Benzinga Pro.
Photo by Kanchanara on Unsplash
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