Ethereum 2.0 has the potential to outperform bitcoin in a long run

Bitcoin and Ethereum were down more than 50% from their all time high in late 2021
Crypto market gained 9% over past few weeks and has seen relief in recent time as some assets are outperforming
Ethereum have gained 17% to current level during the rally which began on Oct 25

The first of the two halves of 2022 has been extremely appalling.Bitcoin and Ethereum were down more than 50% from their all time high in late 2021.But currently there has been some relief as it has been seen in recent time that some assets are outperforming and one of them has been Ethereum (ETH) as it is making more gain than any other crypto asset.

Bitcoin and Ethereum are the digital currency leaders but currently Ethereum has been making more gains than Bitcoin. Crypto market has gained more than 9% over the past weeks. Ethereum gained 17% to current level during the rally which began on oct.25 on the other hand Bitcoin was only able to make 6% over the same period.

Commenting on the same Institutional asset manager Grayscale stated that it could be to do with Ethereum supply growth in a Nov.1 market report

“From a fundamental perspective, ETH’s slowing supply growth post-merge has been a partial driver to outperformance relative to BTC”

The selling pressure has been vastly reduced for Ethereum miners since the network transitioned to proof-of-stake in mid-september because before the merger, just like Bitcoin miners Ethereum miners also had to sell the asset to cover their expenses.

“Without the constraint of miners sell pressure,ETH’s price is now potentially more exposed to larger positive movements,” Grayscale stated

Another reason which led Ethereum to outperform Bitcoin is Ethereum reduced supply issuance. As per the report since the Merge, the issuance of the second largest crypto has decreased by around 14,000 ETH per day or around 5 million fewer per year.

Ethereum supply growth is currently just 0.09% per year as per the Ultrasound money Tracker. And all this has led to a negative or deflationary growth several times recently when network demand increases and more ETH is being burnt than is being produced and this makes it, at least in theory, a very attractive long term hold asset.

Moreover, the merger has led to a reduction in its energy consumption by 99.9% , which has made the asset much more engaging to ESG ( environmental, social and governance) conscious corporations and institutions.

As per the reports of the Digiconomist Ethereum Energy Consumption Index, the energy consumption has dropped from around 84 TW/h per year before the merge to just 0.01 TW/h today.

The Bitcoin price has lost a third of its value since shooting up to almost US$65,000 in april.Ethereum took more time to crash by 50% in mid may. Following the launch of the Ethereum ETF on a Canadian exchange, Ethereum outperforms Bitcoin strongly . where bitcoin only serves as a major source of investment and as a crypto asset but at the same time Ethereum outperform is completely different . It’s a software platform for things like non-fungible tokens and financial services among others.