Journalist
Posted:
Ethereum [ETH] looks bigger when you count the heads. Bitcoin [BTC] looks stronger when you count coins.
On paper, the former outperforms the latter in terms of user participation. But the supply of Bitcoin on the exchanges is decreasing in a much more controlled manner, while the liquidity of Ethereum moves completely differently.
The contrast reveals a lot about how each asset is currently used, held and valued.
The user benefit of Ethereum
At the time of writing, the network has 167.96 million non-empty wallets, almost three times as many as Bitcoin’s 57.62 million. That gap matters because it shows that Ethereum is being used.
Source: Santiment
Ethereum purses are now active endpoints across the board. The rise in the number of non-empty wallets means that new users are still entering the ecosystem, even as prices move sideways. Bitcoin, on the other hand, remains more concentrated.
AMBCrypto previously reported that Ethereum network growth rose to a multi-month high in December, and new wallet creation is surging.
Santiment data shows that nearly 200,000 new ETH wallets were added on December 2 and December 15, levels not seen since Ethereum’s rally at the end of the summer.
The contrast is clear
While Ethereum leads the pack in wallet activity, Bitcoin’s supply on exchanges has dwindled.
According to Glassnode, BTC exchange balances have gradually decreased, from about 2.98 million in mid-November to about 2.94 million in mid-December. Despite price fluctuations, holders are not rushing to sell.
Source: Glassnode
Exchange rate balances are important because they show direct selling pressure. Coins that are not offered on exchanges are less likely to be traded. In this sense, Bitcoin’s shrinking stock market means confidence, even with fewer wallets overall.
What ETH/BTC says
The pair attempted a short breakout in early December but failed to maintain gains and quickly rolled over. Since then, ETH has struggled to outperform BTC on a relative basis, with the rebound proving to be shallow and short-lived.
Even as Ethereum attracts more users, capital continues to drive Bitcoin’s stability.
Source: TradingView
Traders appear to be more comfortable holding BTC during periods of uncertainty, while ETH remains more susceptible to risk. For the time being, participation strength has not translated into relative price leadership.
Final thoughts
- Ethereum leads in terms of users with 168 million wallets, but the shrinking supply of Bitcoins shows more confidence.
- Until ETH/BTC regains momentum, Bitcoin remains the favorite asset.