We look at the last 16 months of Ethereum (ETH) and Bitcoin (BTC).
1. Volatility is the true winner
2. Ethereum is generally strengthening relative to Bitcoin
3. There’s an explanation for that (the more useful one seems to be doing better).
4. We believe Ethereum will continue to perform better than Bitcoin.
The variability of the ratio between ETH and BTC since January 2017 has been significant. However, there is a clear upwards trend
We find the Silver/Gold price a useful comparison. During the same time period, it shows small random walk fluctuations, and a very slight downward trend.
Volatility reigns in the crypto market. The two most senior, and arguably most stable crypros are far more volatile than precious metals. Using standard deviation from the comparative price charts as a proxy for volatility, we see the crypto volatility is 10x that of precious metals.
Why We Think ETH Will Continue to Outperform BTC
1. It’s the Architecture. Ethereum was built to correct some of the early issues with Bitcoin, including incorporating smart contracts – digital agreements that allow for more complex actions than Bitcoin can allow.
2. It’s the Ecosystem. Ethereum is a platform that supports hundreds of other coins, tokens and applications, all of which drive demand for Ethereum the platform and Ethereum the currency (also called Ether).
3. It’s the Performance. As we’ve noted in prior notes (see www.coreventusinc.com) BTC’s transactions speeds and costs are far higher than ETH – BTC is unusable for everyday transactions, while ETH is usable.
So this is our call as of today – ETH will outperform BTC in 2018.