Since the Ethereum Merge went live in September 2022, Ether has significantly underperformed Bitcoin. The Merge completely transformed Ethereum, switching the network to a proof-of-stake mechanism rather than the proof-of-work mechanism it was on previously. This caused the total circulating supply of ETH to contract from that date, and more Ether has been staked since the Shapella upgrade in April.
However, despite the lower supply, demand for Ethereum has fallen in relation to Bitcoin, overriding the effects of the lower supply. This is likely due to the regulatory crackdown and greater institutional interest in Bitcoin. The crypto market has been on fire this year, yet Ether has fallen still further against Bitcoin.
The demand for Bitcoin is further being bolstered by the slew of Bitcoin ETFs submitted for approval from some of the world’s biggest asset managers, including Blackrock. Despite this, Ether investors can still be content, as the token is up 57% this year.
