André Dragosch, the head of research at ETC Group, believes that ether may surpass bitcoin in 2024. He pointed out that Ethereum’s status as a top smart contract platform and technological advancements will drive Ether’s possible reversal of its relative underperformance against Bitcoin in 2023.
“Ether underperformed bitcoin over the past 12 months, however, ether could outperform bitcoin over the coming 12 months,” Dragosch stated.
Dragosch identified several elements in a recent ETC Group report that would support an increase in the price of ether, such as the deflationary “burn mechanism” included in the Ethereum Improvement Proposal EIP-1559 in August 2021.
Dragosch went on to say that the second-largest digital asset by market capitalization might surpass Bitcoin if the supply of ether is reduced and ETH staking payouts become appealing.
“Ether’s net supply issuance amounts to minus 1.1% per annum, as approximately 1.84% per annum are currently being burnt. Traditional investors can think of the staking yield as some kind of equity dividend, while the burn rate can be considered as an equity buyback yield,” he said.
Despite these indications of ether’s price growth, David Schwed, the COO of Holborn, stated that “bitcoin’s established role and stability position it to potentially outperform ether in the long term.”
Dragosch went on to say that “ether to bitcoin’s 12-months relative performance has historically shown a strong tendency to mean revert.”
He noted that ether has continuously outperformed bitcoin from its launch in July 2015 and predicted that it will likely revert to its average relative performance against bitcoin, except in 2023.
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