Ethereum (ETH) capital inflows pale against Bitcoin (BTC)

During the current cycle, BTC and ETH have witnessed a growing divergence in their respective performances.

According to Glassnode’s findings, this can be attributed to a general trend of weaker capital turnover, especially compared to previous cycles and historical developments.

Ethereum receives weak capital flows

Ahead of bitcoin’s peak set on March 14, Glassnode saw an increase in speculative activity. According to its latest weekly on-chain report, capital accumulation was seen among short-term holders of BTC, with roughly $240 billion in coin wealth moved over the past six months, near peak levels.

The same cannot be said for Ethereum, which has so far failed to replicate this trend. The leading altcoin has yet to even break its 2021 high. As such, Bitcoin’s short-term holder (STH) realized limit is almost at the same level as the peak of the last bull run , while Ethereum’s STH realized cap has barely risen from its lows, indicating a notably lackluster inflow of new capital.

This dearth of new capital inflows reflects the underperformance of ETH compared to BTC. This could be partly due to the attention and affordability offered by spot Bitcoin ETFs.

The market is still anticipating the SEC’s decision on whether to approve a set of Ethereum ETFs, which is expected by the end of May.

As a result, “converted” Ether investors are “sitting and patiently waiting for higher prices”.

“When we break down capital flows and turnover between BTC and ETH, we can see that Bitcoin has received the lion’s share of inflows, likely driven in part by US spot ETFs. Short-term holders and activity of speculation appears to be concentrated within Bitcoin, with a notably weak spillover to Ethereum so far.

Ethereum price performance so far

While ETH may underperform BTC due to the lack of a catalyst, Glassnode’s analysis suggests that the overall uptrend appears to be one of the most resilient in history, with corrections relatively superficial so far.

The altcoin has been struggling to break above $3,000. It hit a multi-year high of nearly $4,000 earlier this year, but has been unable to sustain its run and is now a major low.

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