Bitcoin and Ethereum are the two major players in crypto.
The investment thesis for these two digital assets is totally different. One is a store of value. The other is a smart contract platform. Different use cases. Different total addressable market. Different growth vectors. Different risk profiles.
Yet those two are very highly correlated.
In the less than 10 years BTC and ETH have coexisted, Bitcoin typically is the driver of the large price movements and:
- During bull markets Ethereum grows faster.
- During bear markets Ethereum is crashing harder.
And in the previous halving cycle Ethereum completely collapsed against Bitcoin during the bear market. At one point ETH/BTC was up almost 800%. Two years later, in the depth of the bear market, ETH/BTC was back at 0%.
But this time is different. ETH gained more than 200% against BTC and it is not giving that back.
Even though Bitcoin is in the spotlight with the ETFs and the upcoming halving, this 200% so far is the line in the sand.
Could be the first sign that the decoupling between these two assets is around the corner.
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