- Ethereum has recorded lower capital inflows compared to Bitcoin since January.
- Long-term holders of ETH are waiting for it to reach new all-time highs.
Major altcoin Ethereum [ETH] Performance is poor compared to Bitcoin [BTC] Since January, Glassnode has been found in a new location report.
According to on-chain data providers, BTC has seen significant inflows since the beginning of the year, helped in part by US spot exchange-traded funds (ETFs), while ETH has recorded a decline in trading activity.
ETH remains in the shadow of BTC
Following the approval of the Spot Bitcoin ETF on January 10, Glassnode data shows a large discrepancy in net unrealized gains and losses (NUPL) between BTC and ETH.
IThe on-chain analytics firm noted in its report that this suggests that BTC investors have since earned more profits compared to ETH investors.
The NUPL indicator determines whether the owner of an asset is experiencing unrealized gains and losses. Compare the average purchase price of all tokens held by an investor with the current market price.
If the market price is high, unrealized gains will occur, and if the market price is low, unrealized losses will occur.
According to Glassnode, the critical threshold for NUPL is when the value exceeds 0.5. This is because it indicates that the unrealized gain on the asset is more than 50% of its market capitalization.
Mr Glasnod said:
“Amidst the hype and market rally surrounding the approval of the Spot Bitcoin ETF, the unrealized gains of Bitcoin holders expanded significantly faster than the unrealized gains of Ethereum investors. As a result, Bitcoin’s NUPL index rose above 0.5. It entered the euphoria phase three months earlier than comparable indicators on Ethereum.”
Source: Glassnode
Furthermore, since spot ETFs became available for trading in the US, ETH has yet to see large inflows of new funds like BTC.
Glassnode evaluated the realized cap for short-term holders of both coins and found that ETH remains lower.
This suggests that the activity of short-term investors in the coin, which is known to have a large impact on the price performance of the asset, is decreasing.
The report further states:
“In many ways, this lack of new capital inflows reflects the poor performance of ETH compared to BTC. This is likely due to the attention and access brought by the Spot Bitcoin ETF. It seems.”
As for why this happens, Glassnode added:
“The market is still awaiting the SEC’s decision on the approval of a series of ETH ETFs, expected at the end of May.”
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Due to the difference in the performance of the coins, long-term holders (LTH) of BTC and ETH are adopting different strategies.
BTC LTH sold some of its holdings to secure profits after the coin rose to an all-time high, while ETH LTH –
“It appears we are still waiting for further profit-taking opportunities.”
