Key Points
- Ethereum has seen reduced capital inflows and trading activity compared to Bitcoin since January.
- Ethereum’s long-term holders are still waiting for better profit-taking opportunities.
Ethereum has been lagging behind Bitcoin in terms of capital inflows since the start of the year.
This was revealed in a recent report by on-chain data provider Glassnode.
Bitcoin Outperforms Ethereum
The report indicated that Bitcoin, supported partly by the US spot exchange-traded funds (ETF), has seen significant capital inflows since January. In contrast, Ethereum has experienced a decline in trading activity.
The approval of spot Bitcoin ETFs on January 10th led to a noticeable divergence in Net Unrealized Profit/Loss (NUPL) between Bitcoin and Ethereum.
Glassnode’s report suggests that since then, Bitcoin investors have reaped a larger share of profits than Ethereum investors.
NUPL is a metric that determines whether an asset’s holders are experiencing unrealized gains or losses by comparing the average purchase price of all tokens held by investors to the current market price.
Ethereum’s Performance
When the market price is higher, there is a net-unrealized profit, and when it’s lower, there is a net-unrealized loss. A significant threshold for the NUPL is when the value exceeds 0.5, indicating that an asset’s unrealized profit is greater than 50% of its total market capitalization.
Glassnode reported that the approval of the spot Bitcoin ETFs caused Bitcoin holders’ unrealized profit to grow considerably faster than that of Ethereum investors.
Unlike Bitcoin, Ethereum has not seen a strong inflow of new capital since spot ETFs became tradeable in the US.
Glassnode’s analysis of the Short-Term Holders’ Realized Cap for both coins revealed that Ethereum’s remains low, suggesting less activity from short-term investors, who often significantly influence an asset’s price performance.
The market is still waiting for the SEC’s decision for approval of a suite of Ethereum ETFs expected towards the end of May.
Different Strategies for BTC and ETH Long-Term Holders
Due to the difference in the performance of the coins, long-term holders (LTHs) of Bitcoin and Ethereum have adopted different strategies.
Bitcoin’s LTHs have sold some of their holdings to book profits following the coin’s rally to a new all-time high, while Ethereum’s LTHs are still waiting for better profit-taking opportunities.
