Ethereum is edging Bitcoin in the crypto race. The global market cap has now gone above the $1 trillion mark and sits at $1.06 trillion at the time of writing. Over the last week, cryptocurrencies across the market have gained more than 5% on average, contributing to this rise in the global crypto market cap value.
While some cryptocurrencies have performed better than others, more attention seems drawn to the difference in gains between Bitcoin and its younger counterpart, ETH.
ETH, it seems, has been outperforming the flagship cryptocurrency over the last 10 days.
From early last week until this week, while ETH has moved about 17.4% to the upside, Bitcoin has only managed to gain about 6.2%.
According to Grayscale, the institutional asset management firm, in a report, stated that Ethereum's stellar performance may be due to the rate at which its circulating supply growth has slowed since the merge.
According to the report, there may be three main reasons for Ethereum's performance.
According to the Grayscale report, the supply issuance of ETH has reduced by about 14,000 ETH a day, or only about 5 million coins a year. The ETH data aggregation platform, ultrasound money, also calculates that the growth in Ethereum's supply has only grown by about 0.09% per year, as opposed to the 4% it would have been if the ETH merge hadn't happened.
After this reduction in supply issuance, it is safe to say that more ETH is being burned than minted. So far, cryptocurrency has become more deflationary as a cryptocurrency, leading to its meteoric rise in price.
Before the merge, when Ethereum was a proof-of-work cryptocurrency, the miners were forced to sell some of the profits from their mining operation to cover the costs of running their mining rigs.
Ever since the conversion of the ETH network to a Proof-of-Stake consensus mechanism, the selling pressure from these miners has become a thing of the past.
The rate of energy consumption of the Ethereum network has greatly reduced since the merge. According to the Digiconomist Ethereum energy consumption Index, the Ethereum network now consumes less than 0.01% of its initial energy intake.
According to the index, compared to the energy consumed 84 Terrawatt-hour per year before the merge, the Ethereum network now consumes about 0.01 terawatt-hours.
According to digiconomist, this energy consumption rate is comparable to that of Gibraltar and has made Ethereum a more favorable investment for investors.
After breaking through the $1,600 mark during last week's bullishness, the Ethereum bulls appear to have lost strength. This loss of bullish momentum has resulted in a reversal from this level. At the time of writing, Ethereum is currently consolidating around the $1,600 and $1,500 zone.
According to data from CoinMarketCap, ETH is currently worth $1,565 per token and has fallen by 1.52% today.
Ethereum is up 24% over the past month. However, from a longer-termed perspective, the cryptocurrency has been in a range since May. Ethereum is currently down by about 67.6% from its November 2021 all-time high, slightly improved compared to Bitcoin's drop.
Disclaimer: Voice of crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.