Leading altcoin Ethereum has surpassed Bitcoin 2X in Compound Annual Growth Rate over the past 4 years. On-chain data reveals that Ethereum has outperformed Bitcoin twice over the past 4 years, with a CAGR of 66%.
Leading altcoin outperformed leading crypto
Four-year Compound Annual Growth Rate (CAGR) data for Ethereum and Bitcoin from on-chain analytics platform Glassnode shows that ETH has outperformed Bitcoin since October 2019.
ETH CAGR 4 years | Source: GlassnodeThe period was chosen to both capture the classic Bitcoin halving cycle and account for the typical bull/bear cycle that tends to have a similar duration. Bitcoin registered a CAGR of 34.1%. However, Ethereum almost doubled at 66.3%.
BTC YBBO 4years | Source: GlassnodeCAGR data for Ethereum started in July 2019. Since then, the correlation between Ethereum and Bitcoin has been relatively low. Bitcoin’s peak CAGR returns in 2014. The leading altcoin Ethereum, on the other hand, peaked on October 20, 2019.
Bitcoin’s highest CAGR was close to 800%, while Ethereum’s all-time high came in around 350%. Both cryptocurrencies have seen a decrease in CAGR as market cap has increased and markets have matured. However, Bitcoin has been bearish in CAGR since 2016, while Ethereum saw growth in 2019 and 2021.
Also, the CAGR for Ethereum has been rising steadily since June. But Bitcoin is range-bound between 36% and 61% throughout the year. A significant divergence between Bitcoin price and the four-year CAGR occurred around July 2021. Bitcoin’s CAGR has been relatively correlated to its price up to this point. However, as Bitcoin’s price bounced back to 2017 highs, the CAGR fell off a cliff in November 2021, just after Bitcoin recorded an all-time high.
Is it possible for Ethereum to lead a bull run?
After major upgrades to the Ethereum network as part of The Merge, could its CAGR indicate that it will lead the next bull run? The fundamentals of Ethereum and Bitcoin have changed more than ever before. It is also heading towards the 2024 Bitcoin halving.
Ethereum’s maximum supply has been slowly falling since The Merge. However, it is possible that the increase in on-chain activity may accelerate this process. Bitcoin’s maximum supply is fixed. However, emissions will drop in half during the next halving. On the other hand, the effects of The Merge reduced ETH emissions with three halvings. As such, Ethereum has fallen under what is known as the ‘triple halving’.
cryptocoin.com As you follow, the previous two Bitcoin halvings took place about 18 months before the all-time high was recorded. Could the same lagging effect occur for Ethereum after Merge to ignite the next bull run? It is possible that the answer to these will give an idea of the competitors’ race.
