Ethereum (ETH) has underperformed Bitcoin (BTC) by up to 44% since Ethereum's transition to a proof-of-stake (PoS) network known as 'Merge' nearly two years ago, analysts at CryptoQuant report.
Transition to Proof-of-Stake and Its Impact
The shift from the energy-intensive proof-of-work (PoW) mechanism to proof-of-stake (PoS) was hailed as a major upgrade to Ethereum's blockchain. However, since the transition, ETH's performance has significantly lagged behind Bitcoin.
Comparison with Other Cryptocurrencies
Besides Bitcoin, Ethereum has also lagged behind other major altcoins. According to Julio Moreno, CryptoQuant's Head of Research, 'Ethereum has underperformed altcoins like Solana and BNB since the Merge, down 53% and 18% respectively.'
Future Prospects
Looking ahead, CryptoQuant analysts suggest that ETH could continue to lose value relative to Bitcoin. 'We estimate that ETH would need to drop by approximately 50% to reach 0.02 in bitcoin terms for it to enter undervaluation territory,' the analysts wrote. The main reasons for this underperformance include weaker network activity and unfavorable supply dynamics. Investor sentiment also seems to be shifting towards Bitcoin.
Thus, despite the significant Merge update, Ethereum continues to underperform compared to Bitcoin and other major altcoins. Experts predict further decline in ETH value relative to BTC, given current network and market trends.
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