Ethereum Shines in Comparison to Bitcoin, New Analysis Shows
For anyone managing an investment portfolio today, it’s crucial to consider Ethereum, as highlighted by Fidelity Investments.
While Bitcoin often dominates the conversation, Ethereum also offers significant value.
Recent analysis of Ethereum’s performance metrics—such as Beta, CAGR, Volatility, Sharpe Ratio, Sortino Ratio, and Correlations—shows it has excelled in several areas compared to Bitcoin. Over the past four years (2020-2024), Ethereum has outperformed Bitcoin from the previous cycle (2016-2020) in terms of returns relative to risk.
The Sharpe and Sortino Ratios, which measure returns adjusted for risk, indicate that Ethereum has provided favorable returns for its level of volatility. This analysis excludes Ethereum’s staking yields, which add an extra layer of value to the asset.
While Bitcoin had an edge in the 2016 cycle with a higher CAGR, the difference in volatility between Bitcoin and Ethereum has diminished recently. Both cryptocurrencies have shown reduced volatility over time, with Ethereum closely trailing Bitcoin in stability.
READ MORE: Crypto Millionaire Loses $43 Million on Failed Ethereum Bet
Long-term holding data supports investing in these assets. Bitcoin has seen minimal losses over nine years, and Ethereum’s loss days are slightly higher but still rare, reinforcing the benefits of a long-term investment approach.
Despite Ethereum’s technological advancements, such as the Merge and recent upgrades, its correlation with Bitcoin remains high, indicating that both assets often move in tandem. However, Ethereum’s broader utility in supporting stablecoins and its faster transaction capabilities provide distinct advantages.
Ethereum’s network has processed $3.5 trillion in stablecoin transfers, outpacing Bitcoin. Its established infrastructure and developer base are robust, but the platform faces challenges, including technical risks and the potential for its price appreciation to be capped by the success of its applications and tokens.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
