Ethereum Dominance: In the Current Year, Long-Term ETH Holdings Exceed Bitcoin

Introduction

In a significant development for the Ethereum (ETH) community, the proportion of ETH held by long-term holders has surged to a record 70% since December 1, according to blockchain analytics firm IntoTheBlock. This milestone places Ethereum ahead of Bitcoin (BTC) by the same metric, as Bitcoin’s long-term holder percentage hovers just shy of 70%. The increasing concentration of ETH in the hands of committed holders is seen by some market observers as a strong indicator of confidence in the cryptocurrency’s long-term potential.

The Rising Conviction

The surge in the proportion of ETH held by long-term investors coincides with growing predictions that Ethereum is poised to outshine Bitcoin in the near future. Notably, on December 23, renowned crypto analyst Raoul Pal reiterated his earlier forecast suggesting that 2024 could witness a repeat of the 2021 cycle, where ETH outperformed BTC. In 2021, Ethereum’s performance soared by 254%, while Bitcoin experienced a more modest 45% growth after initially lagging behind.

Raoul Pal’s tweet on December 21 highlighted the historical performance trend: “For all the ETH bears… in Feb 2021, BTC first hit $44,000 (where it is today) and ETH was at $1400 (now $2250), 9 months later ETH was up 245%, BTC was up 45%…I think ETH outperforming BTC will be a key macro trend of 2024.”

JPMorgan’s Optimistic Outlook

JPMorgan analysts, known for their conservative stance on the crypto market, have also expressed optimism about Ethereum’s future performance. Despite their overall caution, they predict that by 2024, ETH will surpass BTC and other digital assets in market price performance. This positive outlook is attributed to the forthcoming EIP-4844 upgrade, protodanksharding, set to launch in the first half of 2024. This upgrade is expected to significantly enhance Ethereum’s network performance through the implementation of a more efficient sharding method.

Current Market Dynamics

Although Ethereum’s current price still lags behind Bitcoin, the recent impressive performance of altcoins and Layer 2 (L2) projects suggests a potential ETH rally. At the time of writing, Ethereum is priced at $2,300—a 4.3% increase over the past seven days and an impressive 88.6% increase over the last 12 months.

Vitalik Buterin’s Moves

In the midst of these developments, Ethereum co-founder Vitalik Buterin has attracted attention by transferring 500 ETH, valued at over $1 million, to Coinbase, according to onchain analysts. This follows a series of significant transfers made by Buterin in September, sparking speculation about him selling his crypto holdings. However, Buterin clarified in October that these transfers were for philanthropic purposes rather than personal gain.

The recent activity in Buterin’s Ethereum wallet, including a $3.79 million transfer in ETH over ten days in September, led to speculation about the disposition of his holdings. Nevertheless, his clarification emphasizes a commitment to using his assets for philanthropy rather than personal financial gain.

In conclusion, Ethereum’s recent record-breaking long-term holder numbers, coupled with positive market predictions and upcoming upgrades, point towards a promising future for the second-largest cryptocurrency. As we move into 2024, all eyes are on Ethereum to see if it can once again outshine Bitcoin in a manner reminiscent of the 2021 cycle.

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