Undoubtedly a fact: Bitcoin and Ethereum are the two largest cryptocurrencies in the world today. The battle between these two currencies has dragged on over the past year and the quiet competition between the two assets continues to shape the cryptocurrency world.
Ethereum outperformed Bitcoin during 2021
To be specific, based on multiple metrics, Bitcoin is currently the largest currency in the world and reached a new high of more than $ 68,000 in the year ending. This means that the asset recorded 58% growth in value compared to 2020.
However, despite this amazing performance, Bitcoin’s performance is almost insignificant compared to some other currencies, including Ethereum.
The growth of the second crypto asset through market capitalization during this period surpassed the growth of its more significant partner.
Ether grew over 140% over the same period.
A breakdown of this higher growth, based on quarterly returns, shows that ETH outperformed BTC in all four quarters last year.
A quick look at the quarter shows that Ethereum’s value increased by 102% in the first quarter of 2021. This is Ethereum ‘s best performance over a three – month period, which surpassed Bitcoin during the year.
Factors Contributing to Ethereum Performance
How Ethereum was able to outperform Bitcoin and the answer, however, is not far-fetished or surprising to most of the market.
This is simply because, over the past year, many factors have worked in favor of the largest altcoin; and the NFT increasing gas charges, as well as DeFi attracting billions in user funds and receiving constant network updates.
It was also noted that the EIP-1559 update was introduced which introduced a new charging structure that made Ethereum deflationary in nature. One of the first deflation blocks that appeared on the network soon after gave the network less ETH than it had burned.
Meanwhile, Ethereum’s outperformance against Bitcoin seems to be long gone. In fact, bitcoin entered the new year with the same price action and volatility as last year. Over the past seven days, Bitcoin has lost 2.6% of its value, and Ethereum has seen a 0.1% rise.