Michael Nadeau, founder of The DeFi Report, wrote on X platform that ETH is a more reflective asset than Bitcoin. But we haven't seen this performance in the bull market after the merger, EIP1559, and ETH ETF.
5 reasons why it is more reflective and why I expect ETH to outperform BTC in the second half of this cycle:
1. Ethereum validators have extremely low operating costs. Therefore, there are significantly fewer "structural sell-offs" in this asset than BTC.
2. Ethereum "destroys" or "buys back" tokens when using the network. About 80% of user transaction fees are destroyed, and the remaining 20% is used to compensate the network's supply side.
3. Ethereum has more on-chain activities than Bitcoin, including DeFi, L2, games, NFTs, etc. During periods of high usage, its network consumes more and more ETH.
4. Nearly 40% of ETH supply is "soft locked" on the chain, providing services within DeFi or as on-chain collateral.
5. Token rewards. Bitcoin pays out about $43.8 million in token rewards to miners every day. Ethereum pays out about $7.2 million per day. Bitcoin has $36.6 million more potential selling activity per day than Ethereum.