- Ethereum lags behind Bitcoin in institutional demand
- Ethereum holds a strong lead over Bitcoin in one key area.
The spot Ethereum ETF may have brought some excitement to the market, but the enthusiasm has not been on par with that seen with Bitcoin, which is consistent with Bitcoin’s promotion by the political elite.
This observation highlights Bitcoin’s advantage over Ethereum, but does Ethereum also have a liquidity disadvantage? Indeed, in recent QCP Analysis He suggested that Ethereum may be excluded from the macro capital markets while the market continues to support Bitcoin.
Since both Bitcoin and Ethereum are available as spot ETF assets, comparing their performances may make the differences in performance more clear.
Bitcoin ETF Net Flow According to Coinglass, the average over the past two weeks was nearly 300,000 BTC, while total spot ETF net flows for Ethereum were -114,350 ETH.
Source: Coinglass
The data revealed that demand for Bitcoin is stronger compared to ETH in the spot ETF segment.
Our assessment reveals the same about fund holdings: according to CryptoQuant, ETH fund holdings are at 2,026,328.5 ETH, equivalent to $5.32 billion at ETH’s price at the time of writing.
Source: CryptoQuant
It is worth noting here that despite the market recovery, ETH fund holdings are still trending downwards at the time of writing.
Meanwhile, the Bitcoin Fund’s holdings are at 280,951.35 BTC, valued at $17.07 billion at the time of writing, just over three times that of ETH. This is despite the fact that the BTC Fund’s holdings have also declined over the past four weeks.
Is that a fair comparison?
The aforementioned data confirmed that Bitcoin is more favored in the capital markets as compared to Ethereum.
This may explain why the fund holds more Bitcoin than Ethereum, but Ethereum wins in other key areas too, such as by having a much larger total number of addresses with 116.97 million balances.
Source: IntoTheBlock
By comparison, the total number of addresses with Bitcoin balances is “only” 52.67 million, which is less than half the total number of Ethereum addresses.
This highlights one of Ethereum’s strengths as an expanding ecosystem, and is perhaps one of the biggest reasons why Ethereum recently received spot ETF approval.
There’s no doubt that Bitcoin’s early lead over Ethereum is a clear advantage. But Ethereum also brings opportunities that institutional investors are beginning to embrace. Additionally, Ethereum ETFs are only a few weeks old, while Bitcoin ETFs have been around for months.
It should become clearer how Ethereum fare in the macro capital markets in the remaining months of 2024. That said, our findings confirm that Ethereum is at a slight disadvantage to Bitcoin when it comes to securing institutional liquidity.
This may also explain the difference in price fluctuations between BTC and ETH.
