Ethereum (ETH) has faced a rough start to 2024, declining 22% year-to-date while Bitcoin (BTC) has surged on strong ETF inflows. However, Citi strategists argue that Ethereum’s fundamental outlook remains more resilient than it appears.
Ethereum’s Challenges and Opportunities
Why ETH Has Struggled
User Activity Shift – Many users have migrated to Layer 2 (L2) networks and Solana (SOL) for faster and cheaper transactions.
Lower On-Chain Activity – Compared to Bitcoin, Ethereum’s on-chain transaction volume has been weaker.
Positive Signs for Ethereum
Growing Total Value Locked (TVL) – Despite weak user growth, TVL in ETH terms is rising, indicating increased capital commitment to the network.
ETF Flows Have Turned Positive – Ethereum ETFs have recorded $3.2 billion in net inflows since their July 2024 launch.
Search Interest & Political Support – Increased Google search interest and the Trump-linked World Liberty Financial holding over $200 million in ETH could signal long-term regulatory optimism.
Bitcoin Dominates with Record ETF Inflows
Spot Bitcoin ETFs launched in January 2024 have attracted $40.6 billion in net inflows.
Bitcoin ETF inflows have accounted for 40% of the variance in BTC’s weekly price movements.
Post-election optimism has fueled a sharp increase in ETF inflows.
On-Chain vs. Off-Chain Metrics
Bitcoin trading volumes remain high, especially on decentralized exchanges (DEXs) compared to centralized platforms.
Ethereum’s ETF flows have improved, but on-chain activity lags behind Bitcoin.
Tracking Ethereum’s Market Outlook
For investors looking to monitor Ethereum’s market movements, key resources include:
Crypto Currency API – Track real-time Ethereum and Bitcoin prices, trading volumes, and market data.
Earnings Calendar API – Stay updated on macro events impacting crypto markets, such as ETF approvals and regulatory updates.
Conclusion
Ethereum may be underperforming Bitcoin, but rising ETF inflows, increasing TVL, and potential regulatory clarity offer reasons for long-term optimism. While Bitcoin remains dominant, Ethereum’s fundamental strength could support a rebound as investor sentiment improves.
