Could Ethereum outperform Bitcoin in the next bull run?

18 Mar, 2019 | Updated: 18 Mar, 2019
by Will Heasman
Analysis
Could Ethereum outperform Bitcoin in the next bull run?

Bitcoin seems to consistently drive the market, with every other altcoin being correlated in some way with the #1, Ethereum is no exception. However, it seems like the #2 may finally have its turn in the spotlight during the next bull run…

Despite this perceived correlation with Bitcoin (BTC), the opening months of 2019 have been especially kind to altcoins, triggering what deem to be an alt season of sorts, or at least the beginnings of one.

Since January some altcoins such as Binance coin (BNB), and Litecoin (LTC) are citing more than 100% increases in price, in comparison, BTC has gained little over 5% in that time.

It’s no surprise then that research from Delphi Digital hints at Ethereum (ETH) outperforming BTC in the next bull run.... as long as that bull run is soon.

Delphi Digital based their assumption on volatility, according to the research ETH is experiencing higher levels of volatility than BTC, nicely mapped out here: 

the graph depicts an overlay of BTC and ETH volatility stretching back to 2017. Over the past 6 months, ETH has been significantly more volatile thanBTC.. This is defined through Beta calculations. These calculations measure the responsiveness of an assets price to changes in the overall market. Any beta value above 1 is indicative of higher volatility as compared to the market.

Another chart plots the intramarket correlation of ETH vs BTC:

This graph tells us that the correlation between the two assets is fading, typically ETH outperforms BTC when these correlations cease, as per alt season.

Many people have been calling alt season of late, and a few analysts have been pointing towards BTC dominance as a tell tale sigh of its imminence.

BTC dominance or lack of such is often correlated to an increase in prices of altcoins; BTC dominance shares an inverse correlation with altcoin dominance with its decline is indicative of a rise in altcoins and vice versa.

With a combination of a lull in dominance, less correlation and higher volatility we may well see ETH (and perhaps some other altcoins) outperform BTC in the near future…

Read more: Bitcoin dominance is slowly receding, is it nearly time for alt-season?

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