Can Ethereum ‘Outshine’ Bitcoin and Become an ‘Institutional-Grade Asset’?

Key Insights:

• Ether (ETH) price is up nearly 70% since mid-June price lows.
• A recent report suggested that Ethereum could attract widespread institutional interest from investors in the future.
• Data highlights that Ethereum outperformed in several adoption metrics over the last few months. 

The larger cryptocurrency market’s attention has been shifting towards the top altcoin, Ethereum, for quite some time now. It isn’t just the much anticipated upcoming Merge or the recent price appreciation ETH saw.

Notably, ether price is up nearly 70% since mid-June price lows. Furthermore, the top altcoin by market cap has outperformed the leading cryptocurrency bitcoin (BTC) by close to 40% over that span.

‘Booms, Busts, and Bitcoin’, a recent Bloomberg Intelligence report, suggested that Ethereum (ETH) could attract widespread institutional interest from investors in the future.

So, with ETH price outperforming BTC over the last couple of months, can Ethereum rise and shine from the bear market and emerge as a ‘global institutional-grade asset’?

Can Ethereum be the King?

The cryptocurrency market has had one king coin since its inception, with bitcoin leading the race as the top cryptocurrency by market capitalization. Ethereum has carved its niche over the last few years not only as an altcoin or cryptocurrency but also as a technology.

After ETH price gains outperformed BTC over the last month, speculation about whether Ethereum could continue outperforming bitcoin started to resurface. However, as the larger market seems to recover from the macro-bearish trend, the more crucial question is whether The Merge could keep ETH’s price going or would price need other catalysts on the way.

Interestingly the report published on August 3 presented that The Merge, scheduled for September 2022, could act as a possible catalyst transforming Ethereum into ‘a global institutional-grade asset.’

The data further highlighted that Ethereum outperformed in several adoption metrics such as active users, non-zero balance addresses, and transactions “in absolute terms to the last bear market and relative to Bitcoin.” The same meant that ETH not only performed better than it did over the last bear market but also outperformed BTC across the abovementioned metrics.

ETH Adoption Metrics Holding Solid

Bloomberg data further presented that ETH non-zero balance addresses were at an all-time high (3-year 100% percentile) – almost double that of the Bitcoin network as of August 2022. ETH active addresses were also flat year-on-year, noting a 5% rise.

Ethereum active addresses were 113% higher than three years ago, outperforming Bitcoin, which was down 30% over the same period. Furthermore, transaction count has remained firm YoY, with transfer volumes down only 7% despite a price fall of 29%.

One of the most pressing issues around the Ethereum network – its network fee, also came as a relief as price action picked up. Data from Kaiko’s research presented that the network recorded its lowest average transaction fees of $3 on August 4. The current levels were also the lowest transaction fees the network has seen since December 2020.

This drop in transaction fees is a relief to the Ethereum network and its users, as the community in the past has often criticized the high transaction fee. Owing to the lower fees and glimmering adoption metrics, analysts believe that the same could drive the adoption in the decentralized finance (DeFi) and non-fungible tokens (NFT) space as well.

Short-Term Fate Still Shaky

Despite ETH’s price appreciating by nearly 64% from the June 2022 price lows, ETH’s press time price was still down 67.03% from its all-time high. At the time of writing, ETH traded at $1,598.45 after the coin faced considerable resistance at the $1600 support/resistance line from bears.

A look at ETH’s daily chart suggests that the next immediate resistance sits at the $1,600 and the $1750 mark. As BTC notes a short-term price pullback, ETH’s price lacks the primary strength to push above crucial resistance marks because of the current market structure.

Nonetheless, amid anticipation of the upcoming Merge that marks the network’s transition into a Proof-of-Stake (PoS), analysts expect a solid recovery for the Ethereum ecosystem and ETH price.

However, the short-term and mid-short-term metrics still leave a doubt whether this recent price uptick was just a bear market rally or are fundamentals strong enough to push the market.

That said, for now, even though ETH’s long-term trajectory looks secured, speculating whether ETH would outperform bitcoin could be far-fetched thought. Furthermore, bitcoin’s market dominance, monopoly, and first-mover advantage could continue to give the edge to the king coin in the near and mid-term.