With the ongoing trends in the crypto sector, wherein the crypto markets have gained more than 9% in the past week, taking the total capitalization valuation back to $1 trillion, few assets have been observed to outperform others.
Ethereum has been one of the assets that surprised the crypto sector with its performance, and it has been surpassing Bitcoin over the past week. In a rally on October 25, Ethereum made gains up to 17% to current levels compared to Bitcoin, which achieved only 6% in the same period.
In a report published on November 1, Ethereum supply growth was suspected to be behind it, and the slowed-down supply growth post-merge was likely responsible for Ethereum outperforming Bitcoin. Before the merge, Ethereum miners, to cover expenses, had to sell off their assets, whereas, after the merge and Ethereum transitioned to proof-of-stake, the pressure significantly reduced. With the reduction in pressure, the prices of Ethereum are expected to experience a positive surge.
The reduced supply issuance of Ethereum is also suspected of having affected its performance. According to the report, after the merge, Ethereum’s issuance has declined by around 14,000 Ethereum per day or around 5 million fewer per year.
Another report stated that Ethereum’s supply growth is about 0.09% yearly. The figures have also denoted negative values numerous times when the demand increases or more Ethereum is burnt than put into circulation. The theory defines this process to make the asset an attractive long-term hold asset.
The merge also reduced energy consumption by 99.9%, making Ethereum more convincing on environmental, social, and governance grounds as reported by Todayq. These factors were suspected to be behind Ethereum outperforming Bitcoin.
At the time of writing, the price of Ethereum was recorded at $1,557.39, which is a 0.16% surge over the past 5 days. The asset recorded a 67.6% decline compared to November last year; however, it’s better than Bitcoin’s drop.