Ethereum has only just broken its previous all-time high, while Bitcoin set that record in 2020. However, investing in the altcoin with the highest ranking since the bottom in 2018 resulted in a much higher ROI than a comparable portion of USD investment in BTC.
Why is there this unbelievable excess performance? And will it stay that way in the future or is it time for a trend reversal?
Bitcoin Rising Tide is again boosting the larger crypto market
The quote “A rising tide lifts all boats” applies well to the entire cryptocurrency market. When Bitcoin goes up, it brings the rest of the market with it. And when it falls, the top crypto asset by market cap will drag the rest of the market with it.
Bitcoin’s highly acclaimed meteoric rise in 2017 sparked interest in other altcoins such as Ethereum, Litecoin, and XRP. Ethereum had the secondary benefit of being the foundation on which many other notable altcoins were built at the time, which further drove FOMO for the secondary crypto asset.
Related reading | Technical data suggests an expanded Ethereum dominance over Bitcoin
As strong as bitcoin was, altcoins beat the shocking ROI by miles. But when the bubble burst, Bitcoin, Ethereum, and the rest of the altcoins collapsed.
Another popular quote, “The bigger they are, the harder they are” then came into play. Altcoins that rose ten to a hundred times higher than Bitcoin fell as much as 99%, while the top cryptocurrency held out at just 84%.
And that’s because the recovery in Ethereum has taken so much longer that the altcoin has been outperforming Bitcoin for the past several consecutive years.
If you bought ETH at any point in 2019, 2020 or 2021, you now have more USD worth than with BTC.
– HornHairs 🌊 (@CryptoHornHairs) January 24, 2021
Ethereum and Altcoins could be more profitable in the short term
According to a crypto analyst, buying Ethereum would have resulted in a higher USD return than an equivalent investment in Bitcoin at any point starting in 2019.
The statement is true, however, starting with the low around 2018. As of December 2018, any Ethereum investment would have performed significantly better than the BTC previously held.
Ethereum is up 1700% during the same period Bitcoin is climbed 1000% | Source: ETHUSD on TradingView.com
Over the same period, Ethereum is up 1700%, while Bitcoin only grew a little more than two-thirds of that with an ROI of 1000%.
The fact that there is so much more to recover, and a market is far less liquid and has a lower market cap, has made the money move Ethereum much further than any BTC.
Related reading | Altcoin Expert: Buy A Crypto That Will Last During Bitcoin Crash
Technical data suggests this trend will continue for some time. And if the next season of altcoin is something like the last, even though Bitcoin will result in shocking record prices, the greatest wealth could come from investing in the underdogs.
Featured image from Deposit Photos, Charts from TradingView.com