Ether (ETH) price outperformed Bitcoin (BTC) by 173% from March 28 to May 15. The incredible bull caused the token to reach a $4,380 all-time high. However, as cryptocurrency markets initiated a sharp drop on May 12, the trend started to reverse, and since then, Ether has underperformed by 25%.
Some might say it is a technical adjustment after a strong rally. While this partially explains the move, it excludes some critical factors, including the fast advance of smart-contract network competitors and Bitcoin being adopted as an official currency for the first time.
Notice how the ETH/BTC ratio rallied again on June 8, reaching 0.77 despite Ether’s price remaining 36% below its all-time high and ranging near $2,800. To understand what could have been driving the ratio, analysts need to analyze Ether and Bitcoin price drivers separately.
Mike Novogratz may have been misinterpreted in his interview
Ether’s bull run potentially got an extra leg due to intense praise from institutional investors. Traders could have picked up a sense of urgency, known as FOMO, and promptly shifted their Bitcoin exposure towards the leading altcoin.
On May 13, New Yorker magazine published an interview with Mike Novogratz, the founder, and CEO of Galaxy Digital. In the conversation, Novogratz said:
“All of a sudden, you have decentralized finance and NFTs both on Ethereum at the same time roughly, with wild accelerating growth.”
Novogratz was then questioned on how much higher Ether could reach, to which he answered:
“You know, it’s dangerous to give predictions on the highs. But could it get to $5,000? Of course it could.”
While an Ethereum holder might have interpreted it as a prediction, others could have understood it as a wild guess, likely depending on general crypto market conditions.
However, roughly a week later, a report from Goldman Sachs revealed the global investment bank believed that Ether had a “high chance of overtaking…