Which will win the third quarter of 2024?

The world's number one and two cryptocurrencies by market cap, daily trading volume, and cryptocurrency exchange volume have tied almost perfectly in terms of ROI from January 1 to mid-June.

For comparison, the S&P 500 index is up almost 15% during that same period. But that's more than the broader stock market benchmark typically generates in an entire year.

So even during two unusually good quarters for US stocks, bitcoin and ethereum provided investors with a four-fold return on investment. In other words, bitcoin broke the government's investment planning tool. Again.

The average annualized ROI for bitcoin and ethereum price performance since January 1 is aces. The two main cryptocurrencies are advancing at +116% annually.

This is such a high yield that Investor.gov's compound interest calculator tool it's not It even allows users to enter interest rates higher than 100%.

By the way, if you enter $100 a month into the calculator for 15 years at an estimated interest rate of 15% (above average for the S&P 500), with a daily compounding frequency, you will end up with $68,815 over 15 years to compound your capital. the country's economy with a total of $18,100 in contributions.

If you do the same exercise with bitcoin or ethereum earnings and simply enter 99% for the interest rate, the result is a little different (more like a trillion dollars).

The question is which cryptocurrency will outperform the other in the third quarter, or will bitcoin and ethereum once again be very close to making the same amount of profits for cryptocurrency investors in the next half of the year?

Here are six notable factors worth considering. Some are more bullish for btc, others for eth, and others are a wash between the two giants of the blockchain network.

1. Federal Dollar Inflation (bitcoin Advantage)

The center of gravity of the entire global financial system is the US federal funds rate. It represents the cost to the Federal Reserve banks of borrowing cash from the economy's ultimate lender.

The Federal Reserve interest rate calibrates dollar interest rates for credit products throughout the food chain to store credit cards and payday lenders. When it goes up or down, so does the rest of the financial economy.

But when it rises, it is a huge headwind that puts downward pressure on stock and cryptocurrency prices. However, when it declines, there is a huge tailwind for investment products that tends to put upward pressure on their market prices.

It looks like there will be an interest rate cut for the US dollar later this year. “If everything goes as planned, I think a rate cut would be appropriate by the end of the year.” saying Philadelphia Federal Reserve President Patrick Harker on Monday. After the Federal Reserve left rates unchanged last Wednesday for the seventh consecutive FOMC meeting, Investopedia reported:

“A series of lower-than-expected inflation numbers over the past week have raised expectations that a rate cut by the Federal Reserve is coming, but Fed officials themselves are acting cautiously.”

“What we have been getting is good progress on inflation, with growth at a good level and with a strong labor market,” saying Federal Reserve Chairman Jerome Powell. “Ultimately, we think rates will have to come down to continue to support that. But so far they haven't had to.”

Meanwhile, other central bank economies, such as the United Kingdom and South Korea, it is receiving anxious cut rates.

No if, but when the Federal Reserve finally starts cutting rates again, it will be a tailwind for cryptocurrencies, but especially for bitcoin, due to its deflationary tokenomics, with a strict supply limit of only 21 million btc tokens that will be issued. through the blockchain network.

2. DeFi and DApps (ethereum Advantage)

bitcoin is like digital gold, but ethereum is like the automotive economy that flourished in the 20th century as a result of the Industrial Revolution. bitcoin is scarcity in the digital world of cyber abundance.

It turns out that a world without scarcity is missing something useful. ethereum, meanwhile, is a vehicle to bring different parts of the economy closer together so they can participate in intelligent financial markets.

Usage statistics for MetaMask, Oasis App, MakerDAO and Uniswap continue to amaze in 2024. In February, MetaMask announced a 55% increase in users from 19 million to 30 million in a matter of four months.

The numbers are almost as high as the 2022 peak for MetaMask installations now. The company behind the ethereum wallet says those 30 million users manage 100 million accounts with MetaMask.

Oasis App is a decentralized application (dApp) built on ethereum. According to data hosted by BitDegree, the app's balance was worth about $1,769,996,160 in market value as of Thursday and the dApp had executed 308,620 transactions in the last 30 days (a 100% increase from the previous month).

ethereum MakerDAO is one of those serious and robust DeFi dApps that makes the vision of ethereum a reality. The decentralized app's native cryptocurrency, the DAI stablecoin, is a small economy in itself, with a market capitalization this week surpassing $5.4 billion.

Meanwhile, Uniswap continues to impress. The leading decentralized exchange (DEX) for cryptocurrencies absolutely dominates other DEXs, with fees almost up to $100 million in total over the previous 30-day period.

The only Web3 apps that generated more fee revenue in the last month were: bitcoin, ethereum, Tron, and Lido.

3. Institutional Adoption (bitcoin with Advantage)

BlackRock CEO Larry Fink noted in March that the bitcoin exchange-traded fund was the fastest-growing ETF in history.

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BlackRock CEO Larry Fink says twitter.com/search?q=%24IBIT&src=ctag&ref_src=twsrc%5Etfw” data-wpel-link=”external” target=”_blank”>$GO Place twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw” data-wpel-link=”external” target=”_blank”>#bitcoin twitter.com/hashtag/ETF?src=hash&ref_src=twsrc%5Etfw” data-wpel-link=”external” target=”_blank”>#ETF It is the fastest growing ETF in history
pic.twitter.com/NOsDlFgROi

—Simon Dixon (@SimonDixonTwitt) twitter.com/SimonDixonTwitt/status/1773100957636669749?ref_src=twsrc%5Etfw” data-wpel-link=”external” target=”_blank”>March 27, 2024

Compared to any other cryptocurrency, bitcoin and ethereum have an advantage when it comes to regulatory approval. But against each other, bitcoin still has a clear advantage heading into the third quarter of 2024. Hundreds of millions of dollars flow in and out of Washington-regulated bitcoin ETFs daily.

Former US President Donald Trump now has the confidence to promote cryptocurrencies to voters during the election campaign. Before the last presidential election in 2020, Trump said that he was against bitcoin and cryptocurrencies.

This is a strong sign of institutional and widespread cryptocurrency adoption for bitcoin and ethereum. Trump recently said that he wants all bitcoin to be mined in the United States and believes that can help win the ai ​​arms race.

Meanwhile, VanEck announced on Thursday that it will launch the first bitcoin exchange-traded fund in Australia.

4. Prague Electra (Pectra) Upgrade: (ethereum Advantage)

The Dencun Update, ethereum's most recent major update, was a boon for Ether's market value on crypto exchanges. Ether price went parabolic buying the news from January 24th until the update occurred on March 13th.

ethereum developers plan to ship the Pectra upgrade in early 2025, perhaps Q4 2024, so this will be a bullish tailwind supporting the eth price in the background in the medium term.

Pectra is short for Prague-Electra upgrade.

The Wall Street Stock Analysts at TipRanks recently praised the Pectra upgrade in an article featured on Nasdaq for the upgrade's improved rollups and the new stake limit for eth validators: 2,048 eth.

5. Meme Coins (ethereum Advantage)

ethereum continues to dominate meme coins, but the emergence of fungible token issuance on bitcoin via the UTXO function using a technique called Runes and some big hits in Q2 such as Dog Go To The Moon (Runes) shows that bitcoin is a relevant player in this. niche too.

Through the bitcoin Ordinals technique, nfts minted by btc remain popular and were transacted in volumes of five and ten million dollars daily in June. bitcoin-ordinals-analysis” data-wpel-link=”external” target=”_blank”>according Dune analysis data.

However, the ethereum meme coin economy is a multi-billion dollar concern that continues to drive capital inflows into Web3 like the world has gone mad.

6. Competitive Analysis (bitcoin Advantage)

The competitive landscape is a major factor in the horse race between btc and eth. These are far from the only two cryptocurrencies in the world in 2024.

ethereum grows faster due to the motivation of its competition, but it has many more competitors than bitcoin. Market share in a competitive landscape is a real problem for this coin. It is not just a technology, a toy or a platform; it is a business.

While BNB, Solana, Cardano, Avalanche, Aptos and hundreds more compete with ethereum for DeFi market share, there is only one bitcoin with just 21 million btc. Web 2.0 professors Jack Dorsey and Mark Zuckerberg know that Web3 competition for those oranges is about to get fierce.

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