- Ethereum lags behind Bitcoin in institutional investor demand
- Ethereum, however, maintains a strong lead over Bitcoin in one key area.
Ethereum spot ETFs may have generated some excitement in the market, but the excitement hasn’t been on par with what we’ve seen with Bitcoin. This is consistent with the political elites’ push to promote Bitcoin.
While this observation highlights how Bitcoin is eclipsing Ethereum, could the latter also be at a liquidity disadvantage? In fact, a recent analysis from QCP suggests that Ethereum could be sidelined from macro capital markets as the market continues to favor Bitcoin.
Since both Bitcoin and Ethereum are available as Spot ETF assets, a performance comparison can provide a clearer picture of the performance differences.
According to Coinglass, Bitcoin ETF net flows have averaged nearly 300,000 BTC over the past two weeks. At the same time, Ethereum has seen a total net flow of -114,350 ETH.
Source: Coinglass
The data revealed stronger demand for Bitcoin, compared to ETH in the spot ETF segment.
Our assessment also revealed the same for the funds’ holdings. According to CryptoQuant, the funds’ ETH holdings stood at 2,026,328.5 ETH, worth $5.32 billion at the ETH price at the time of publication.
Source: CryptoQuant
It is also worth noting here that the fund’s ETH holdings were still on a downward trajectory at the time of writing, despite the market recovery.
Meanwhile, Bitcoin fund holdings stood at 280,951.35 BTC, which at press time was worth $17.07 billion, or just over 3x more than ETH. This is despite the fact that BTC fund holdings have also declined over the past 4 weeks.
A fair comparison?
The above-mentioned data confirmed that Bitcoin is more preferable in financial markets than Ethereum.
This may explain why funds are investing more in Bitcoin than Ethereum. However, Ethereum is also a winner in other key areas. For example, it has a much higher total number of addresses, with a balance of 116.97 million.
Source: IntoTheBlock
By comparison, Bitcoin had a total of “only” 52.67 million total addresses with balance – less than half of Ethereum’s total addresses.
This highlighted one of Ethereum’s strengths as a growing ecosystem. This is perhaps one of the main reasons why Ethereum recently received approval for Spot ETFs.
There’s no doubt that Bitcoin’s initial lead over Ethereum offers a clear advantage. However, Ethereum also presents an opportunity that the institutional class of investors is starting to seize. Additionally, Ethereum ETFs have only been around for a few weeks, while Bitcoin ETFs have been around for months.
The remaining months of 2024 should provide a clearer picture of how Ethereum will perform in the macroeconomic capital market. Nevertheless, the results confirm that Ethereum is at a slight disadvantage compared to Bitcoin in terms of securing institutional liquidity.
This may also explain the differences between BTC and ETH price action.
