Bitcoin trader explains why BTC outperforming Ethereum is just ‘simple math’

Bitcoin trader explains why BTC outperforming Ethereum is just 'simple math'

Bitcoin (BTC) has been outperforming Ether (ETH) in the past several days as BTC surged above $50,000 for the first time in history. Meanwhile, one popular cryptocurrency trader explains that this is “simple math” given the growing institutional demand for BTC. 

Bitcoin trader explains why BTC outperforming Ethereum is just 'simple math'
BTC vs. ETH (orange) performance in February. Source: Tradingview

While ETH is beating BTC in USD terms year-to-date, Bitcoin is gaining steam in February, up 60% compared to Ether’s 50%. 

Ether did rally by roughly 6% over the last 24 hours as Grayscale added 20,000 ETH to its Ethereum Trust. However, Grayscale’s BTC stash is worth $34 billion, which dwarfs its ETH holdings of $5.8 billion.

Bitcoin trader explains why BTC outperforming Ethereum is just 'simple math'
Grayscale ETH Trust flows. Source: Bybt.com

More institutional demand for Bitcoin vs. Ether

Meanwhile, a pseudonymous trader known as Bitcoin Jack noted that despite these latest ETH inflows, one single entity, namely MicroStrategy, is adding 20,000 BTC worth almost $1 billion to its balance sheet.

According to data compiled by Bitcointreasuries, companies are currently holding over 1.2 million BTC worth over $48 billion dollars — and that figure does not yet include Tesla. 

In other words, there is a big difference between the amount of Bitcoin that is being acquired by institutions compared to Ether. Based on this trend, the trader said BTC outperforming ETH is not a surprise. He said:

“Grayscale adds 20,000 $ETH, for its clients, today MicroStrategy, a single entity, adds 20,000 $BTC to its balance sheet, anytime now Bitcoin outperforming shouldn’t be a surprise, just simple math.”

Retail and institutional mania

In the near term, one variable that could catalyze a larger accumulation trend for Ether is the listing of Ethereum futures by CME. As Cointelegraph reported, CME listed Ethereum futures on Feb. 9, the day ETH broke out and achieved a new all-time high.

It has been less than two weeks since the CME Ethereum futures market launched, and many trading desks and institutions are likely still in the process of preparing their infrastructure. Hence, the actual demand and trading volume for ETH in the CME Ethereum futures market will likely take time to grow, as seen with Bitcoin, until funds begin actively trading the asset.

At the same time, with the cryptocurrency bull market is in full, major investment funds and retail investors may be experiencing FOMO, according to Paolo Ardoino, the CTO at Bitfinex. He explained:

Paolo Ardoino, CTO at Bitfinex: “Major investment funds and retail investors alike may be experiencing FOMO (fear of missing out) as bitcoin’s market cap surges towards US$1 trillion. As bitcoin hovers around US$51,000, Ethereum is also touching record highs. Both technologies represent a monumental advance with which even the most senior figures in the digital token space are still grappling. Rather than following blindly or precipitately, one should first familiarise oneself with this amazing tech, whether one is a financial goliath or novice retail investor.”

Lastly, one major factor that underpins Bitcoin’s “digital store of value” proposition is the capped supply of BTC contrary to the unknown total supply of Ether. Therefore, besides the brand image, this digital scarcity aspect is likely what’s driving institutions first and foremost to Bitcoin.

Meanwhile, other cryptocurrencies like ETH remain alternatives or “altcoins” and are typically considered for the purpose of diversifying, albeit in much smaller amounts if any, as exemplified by Grayscale’s holdings. 

Title: Bitcoin trader explains why BTC outperforming Ethereum is just ‘simple math’
Sourced From: cointelegraph.com/news/bitcoin-trader-explains-why-btc-outperforming-ethereum-is-just-simple-math
Published Date: Thu, 18 Feb 2021 17:31:48 +0000

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together

Donna Burk

Donna Burk– Business News My Name is Donna Burk and I am also the main source from the ‘Dailynewssheet.com’ of all the exclusive and most delicate visualization of the activities in the business sector. My first step towards this journey was taken in the very early years of my life. I started with an independent financial consultant. However, I only had almost 4 years of skills and experience in this market. I have always been a free personality and like to fly one place to another, to explore more and more. Moreover, this passion and craze of traveling gave me a chance to report a section for best news associations. Last but not least, I am presently working full-time as an editor.

Leave a Reply

Your email address will not be published. Required fields are marked *

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together