BTC$26 900.03


ETH$1 667.19




Binance Coin




USD Coin


Reasons why Ethereum is unlikely to flip Bitcoin any time soon

10 Aug 2021


For years analysts have predicted that ETH’s market capitalization will flip BTC’s but data shows it's still nothing more than a guessing game. After a 13% rise in two days, Bitcoin's (BTC) market capitalization surpassed $800 billion to reach its highest value in 79 days. During the same timeframe, Ether (ETH) accumulated a 45% gain in two weeks, placing the network's market capitalization at $340 billion. 

Positive expectations for the London hard fork and its potential deflationary effect undoubtedly played a role, but some investors continue to question how Ether's valuation stacks against Bitcoin. Some, including Pantera Capital CEO Dan Morehead, expect Ether to outpace Bitcoin as the largest cryptocurrency.

Market participants may have also been excited after Minneapolis Federal Reserve President Neel Kashkari suggested that the Fed may stick with the asset-purchase program a bit longer. The reason cited was the Delta variant's spread and its potential harm to the labor market.

Kashkari said: "Delta could discourage people from returning to jobs that require in-person interaction and keep kids out of schools."

Extending the stimulus for longer raises the inflationary risk, which increases the attractiveness of scarce assets like real estate, commodities, stocks, and cryptocurrencies. However, the impact of these macroeconomic changes should equally impact Bitcoin and Ether.

Active addresses give Bitcoin a clear lead

Comparing some of Ethereum's metrics could shed some light on whether Ether's 58% discount is justified. The first step should be to measure the number of active addresses, excluding low amounts. As shown above, Bitcoin has 6 million addresses worth $1,000 or higher, and 3.67 million have been created since 2020. Meanwhile, Ether has less than half at 2.7 million addresses with $1,000. The altcoin's growth has also been slower, with 2.4 million of those created since 2020.

This metric is 55% lower for Ether, and this corroborates the market capitalization gap. However, this analysis does not include how much large clients have invested. Although there is no good way to estimate this number, measuring cryptocurrency exchange-traded products could be a good proxy.

Ether lags on exchange-traded products

After aggregating data from multiple exchange-traded instruments, the result is telling. Bitcoin dominates with $32.3 billion in assets under management, while Ether totals $11.7 billion. Grayscale GBTC plays a vital role in this discrepancy because its product was launched in September 2013.

Meanwhile, Ether's first exchange-traded product came in October 2017, when the XBT Provider Ether Tracker was launched. This difference partially explains why Ether's total is 64% lower than Bitcoin's.

Futures open interest justifies the price gap

Lastly, one should compare the futures markets data. Open interest is the best metric of professional investors' actual positions because it measures market participants' total number of contracts. An investor could have bought $50 million worth of Bitcoin futures open interest currently amounts to $14.2 billion, down from a $27.7 billion peak on April 13. Binance exchange leads with $3.4 billion, followed by FTX with another $2.3 billion.

On the other hand, the open interest on Ether futures peaked about a month later at $10.8 billion, and the indicator currently stands at $7.6 billion. Therefore, it is 46% lower than Bitcoin's, which further explains the valuation discount. Other metrics like on-chain data and miner revenues show a more balanced situation, but both cryptocurrencies have different use cases. For example, 54% of the Bitcoin supply has remained untouched for longer than one year.

The truth is that any indicator has a downside, and there is no definitive valuation metric to determine whether a cryptocurrency is above or below its fair value. However, the three metrics analyzed suggest that Ether's upside, when priced in Bitcoin, does not signal a "flippening" anytime soon.


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Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 92% 2 $26 900.03 -0.72% 1.38% $524 536 249 875 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 91.2% 3 $1 667.19 0.60% 4.76% $200 456 859 321 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 91.2% 1 $0.999922 -0.02% -0.01% $83 270 117 769 USDT 7 days price change
4 Binance Coin (BNB) BNB Binance Coin predictions 96% 2 $215.62 0.18% 2.51% $33 172 815 466 BNB 7 days price change
5 XRP (XRP) XRP XRP predictions 89.6% 9 $0.534805 5.33% 4.41% $28 511 729 803 XRP 7 days price change
6 USD Coin (USDC) USDC USD Coin predictions 91.6% 1 $1.000077 -0.02% 0% $25 132 883 987 USDC 7 days price change
7 Lido stETH (STETH) STETH Lido stETH predictions 93.2% 1 $2 941.39 -0.40% -3.32% $10 258 752 564 STETH 7 days price change
8 Wrapped TRON (WTRX) WTRX Wrapped TRON predictions 86% 26 $0.088990 3.76% 6.26% $9 048 152 654 WTRX 7 days price change
9 Dogecoin (DOGE) DOGE Dogecoin predictions 90.4% 6 $0.062031 1.02% 1.05% $8 759 443 620 DOGE 7 days price change
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11 Solana (SOL) SOL Solana predictions 86% 18 $20.26 2.83% 4.73% $8 363 109 994 SOL 7 days price change
12 TRON (TRX) TRX TRON predictions 84.4% 22 $0.089512 3.56% 7.38% $7 973 262 569 TRX 7 days price change
13 Toncoin (TON) TON Toncoin predictions 61.2% 84 $2.21 -1.95% -4.23% $7 568 826 083 TON 7 days price change
14 Dai (DAI) DAI Dai predictions 95.6% 1 $0.999857 -0.04% 0.06% $5 347 122 665 DAI 7 days price change
15 Polkadot (DOT) DOT Polkadot predictions 90.4% 7 $4.08 0.11% 1.80% $5 015 443 173 DOT 7 days price change

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