Founder of The DeFi Report: ETH is expected to outperform BTC in the second half of this cycle
Michael Nadeau, founder of The DeFi Report, claimed on social media that ETH is a more reflexive asset than Bitcoin. However, we have not seen this performance in the bull market after the merger, EIP1559, and ETH ETF. Here are five reasons why it is more reflexive, and why I expect ETH to outperform BTC in the second half of this cycle:
1. The operating cost of Ethereum validators is extremely low. Therefore, the "structural sell-off" in this asset is significantly less than BTC.
2. Ethereum "burns" or "buys back" tokens when using the network. About 80% of user transaction fees are burned, and the remaining 20% is used to compensate the network's suppliers.
3. Ethereum has more on-chain activity than Bitcoin, including DeFi, Layer 2, games, NFT, etc. During periods of high usage, the network will consume more and more ETH.
4. Nearly 40% of ETH supply is "soft-locked" on the chain, providing services in DeFi or as on-chain collateral.
5. Token rewards. Bitcoin pays miners about $43.8 million in token rewards every day. Ethereum pays about $7.2 million per day. Compared with Bitcoin, Ethereum has the potential to sell $36.6 million more per day.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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