For the majority of its existence, Ethereum has been pitted against the leading cryptocurrency, Bitcoin. However, many investors believe that because the former has more use cases, it will be more valuable than bitcoin in the long run.
In terms of performance, Ethereum has outperformed investors’ expectations. For example, it has outperformed bitcoin year after year over the previous few years.
While performance metrics are still important, Ethereum has expanded the competition. It’s no secret that this year’s foreign exchange reserves have been dwindling. Resulting in never-before-seen bull market peaks.
Outflows from exchanges have considerably outstripped inflows, indicating that investors are stockpiling rather than selling their cryptocurrencies.
In a similar vein, Ethereum exchange reserves have slipped below those of bitcoin. Both currencies have increased coin scarcity. However, measures indicate that Ethereum scarcity is greater than Bitcoin’s.
Both assets’ exchange balances relative to their circulating supply have declined this year. Even when the market rose owing to another bull market, the negative trend remained.
Currently, bitcoin exchange balances relative to total circulating supply have reached a three-and-a-half-year low of 13.32 percent.
In contrast, Ethereum’s exchange balance levels were alarmingly low at 12.93 percent compared to its circulating supply. This indicates that the market’s liquid ETH supply has slipped below bitcoin.
Outflows have been more severe on centralized exchanges. As a result, exchange reserves have decreased in the top two cryptocurrencies and throughout the altcoin market.