Ethereum outperforming, despite limitations Ethereum outperforming, despite limitations Ethereum outperforming, despite limitations

Ethereum outperforming, despite limitations

Anders Nysteen

Senior Quantitative Analyst, Saxo Bank

Summary:  Ethereum outperformed Bitcoin over the past week, but limitations appear in the Ethereum technology, and JPMorgan analysts suggest ETH price should be significantly lower based on network activity. Furthermore, multiple ETF applications in the US are still pending, but may be in a new headwind.

Ethereum outpacing Bitcoin but facing headwind

Ethereum is at record-high market dominance of close to 20%, and ETH gained 15 % last week while Bitcoin delivered close-to-zero return. The use case for Ethereum is boosted through its smart contracts which enables multiple (also non-finance related) applications on Ethereum’s blockchain, and the amount of ETH locked in these smart contracts has increased significantly over the past year. However, Ethereum is facing some challenges, as other cryptocurrencies with smart contracts or similar technologies are competing with Ethereum for the smart contract applications, and they benefit from lower transaction fees than Ethereum. Furthermore, reports are stating that 2-5% of transactions of Ethereum-based decentralized exchanges fail. Lastly, JPMorgan analysts are suggesting that ETH should trade 75 % lower if considering the network usage and activity.

ETF applications still pending in US

Supporters of crypto ETFs are seeing the launch of a crypto ETF in the United States as a way to boost the accessibility to crypto trading and thereby the number of active traders/users. While crypto ETFs are already trading in e.g. Canada, ETF applications are still pending in the United States where no application has made its way through. The United States Securities and Exchange Commission (SEC) requires ETF providers to have an exchange partner before considering their application. Wise Origin recently joined the group of exchange-backed ETF providers, and together with three other ETF providers they now have exchange-backed applications awaiting SECs decision. Several other providers have pending applications, although still without any exchange collaborator. However, the Chairman of the SEC, Gary Gensler, recently told Congress that the crypto market “could benefit from greater investor protection”, hinting to a further need for regulation before the SEC can approve any crypto ETFs, lowering the odds for the applications to go through.
BTC against USD. Source: CoinMarketCap.
ETH against USD. Source: CoinMarketCap.

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.