- Ethereum has recorded low capital inflows compared to Bitcoin since January.
- Long-term holders of ETH continue to wait for a new all-time high.
Leading altcoin Ethereum [ETH] has underperformed compared to Bitcoin [BTC] Since January, Glassnode has found a new one report.
According to the on-chain data provider, BTC, helped in part by US spot exchange-traded funds (ETF), has seen significant capital inflows since the start of the year, while ETH has recorded a decline in trading activity.
ETH remains in the shadow of BTC
Following the adoption of spot Bitcoin ETFs on January 10, Glassnode data shows a significant difference in net unrealized gain/loss (NUPL) between BTC and ETH.
IIn its report, the on-chain analytics firm noted that this indicates that BTC investors have since captured a larger share of the gains than their ETH counterparts.
The NUPL metric determines whether the holders of an asset experience unrealized gains or losses. It compares the average purchase price of all tokens held by investors with the current market price.
If the market price is higher, there is a net unrealized gain, while if it is lower, there is a net unrealized loss.
According to Glassnode, a significant threshold for the NUPL is when the value is greater than 0.5. This is because it indicates that an asset’s unrealized gain is greater than 50% of its total market capitalization.
Glassnode said:
“Amid the hype and market rally surrounding (the) adoption of the spot Bitcoin ETFs, Bitcoin holders’ unrealized gains grew significantly faster than those of Ethereum investors. As a result, the Bitcoin NUPL metric exceeded 0.5 and entered the euphoria phase three months earlier than the equivalent metric for Ethereum.”
Source: Glassnode
Furthermore, ETH has not yet seen a strong influx of new capital like BTC since spot ETFs became tradable in the US.
Glassnode assessed the limit realized by short-term holders for both coins and found that the ETH value remains low.
This suggests reduced activity from the currency’s short-term investors, who are known to significantly influence an asset’s price performance.
The report further stated:
“In many ways, this lack of new capital inflows is a reflection of ETH’s underperformance relative to BTC. This is likely in part due to the attention and access that spot Bitcoin ETFs bring.”
As for why this might happen, Glassnode added:
“The market is still awaiting the SEC’s decision on approving a series of ETH ETFs expected in late May.”
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Due to the difference in the coins’ performance, long-term holders (LTHs) of BTC and ETH have followed different strategies.
While BTC’s LTHs have let go of some of their holdings to book gains following the coin’s rally to a new all-time high, ETH’s LTHs are –
“Still seem to be waiting for better opportunities to make a profit.”