Ether Risk-Reward Is Attractive Given Recent Underperformance: Bernstein

Ether (ETH) has underperformed rivals bitcoin (BTC) and solana (SOL) year-to-date, but ETH exchange-traded money (ETF) inflows person inflected suggesting this play of underperformance whitethorn beryllium over, broker Bernstein said successful a probe study Monday.

The broker noted that connected Friday Blackrock's spot ether ETF saw inflows of $250 million, versus lone $137 cardinal of inflows for the plus manager's larger spot bitcoin ETF.

"This creates favorable demand-supply dynamics for ETH," analysts led by Gautam Chhugani wrote.

Ether staking yields could beryllium different tailwind for the cryptocurrency. Bernstein noted that archetypal ether spot ETF applications did not see yields owed to regulatory limitations.

"Under a caller Trump 2.0 crypto affable SEC, ETH staking output volition apt beryllium approved," the authors wrote, adding that arsenic Ethereum blockchain enactment surges the ether output tin turn to 4-5%.

Ethereum blockchain enactment is connected the up, and the web remains the level of prime for plus tokenization and stablecoins, the study said.

Following Ethereum's <a href="https://www.coindesk.com/learn/ethereum-merge-explained-what-investors-should-know-about-the-shift-to-proof-of-stake" target="_blank">transition</a> to a <a href="https://www.coindesk.com/learn/proof-of-work-vs-proof-of-stake-what-is-the-difference" target="_blank">proof-of-stake</a> statement mechanism, the proviso of ether has remained "stagnant" astatine a full of 120 cardinal tokens, Bernstein said.

Ethereum's transaction fees present a output of astir 3% to stakers, which keeps astir 28% of ether proviso locked successful staking contracts, the study noted. Another 10% of proviso is locked successful deposit and lending contracts.

Almost 60% of ether has not changed hands successful the past 12 months which is indicative of a "resilient capitalist base," and this reinforces the affirmative demand-supply dynamics for the cryptocurrency, the study added.

Read more: <a href="https://www.coindesk.com/markets/2024/11/29/ethereum-etfs-inflow-streak-sets-up-eth-for-new-lifetime-highs-traders-say" target="_blank">Ethereum ETF Inflow Streak Sets up ETH for New Lifetime Highs, Traders Say</a>