Steno Research: Ether’s Star Will Shine Again

Steno Research said in a report published yesterday that the recent underperformance of ether (ETH) may be over and the world’s second largest cryptocurrency is ready to shine again compared to both fiat and bitcoin (BTC).

The native token of the Ethereum blockchain has gained nearly 8% since the beginning of the year, while bitcoin has gained 43% and the CoinDesk 20 Index (CD20) has gained nearly 11%.

Steno’s report noted that ETH has been on a roll in the recent altcoin season, more than doubling in value compared to bitcoin in less than two months.

The report highlighted that this shift was triggered by an increase in on-chain activity, including the explosion in decentralized finance (DeFi), stablecoin issuance, and NFTs, all of which are occurring primarily on the Ethereum blockchain.

According to Steno, the Federal Reserve’s rate cut this week will cause increased on-chain activity, which will significantly benefit Ethereum.

The company also believes that bitcoin exchange-traded funds (ETFs) are unlikely to continue to outperform their ether versions.

There are three main reasons why bitcoin has been outperforming ether lately. Analyst Mads Eberhardt lists them as “the impact of US spot ETFs for both bitcoin and ether, buying pressure from MicroStrategy (MSTR), and the significant decline in Ethereum’s transaction revenue in recent months.”

“Ethereum’s active addresses remain strong, especially when taking into account rollup adoption,” Eberhardt said, adding that the network’s transaction revenue appeared to have bottomed in August.