Market research firm Steno Research stated in a report on Thursday that the recent underperformance of Ethereum (ETH) may have come to an end and is ready to shine again, whether in terms of price growth in fiat currency or relative to Bitcoin (BTC).

The price of Ethereum once rose from $2280 at the beginning of the year to $4090, but in the past six months it has fallen back to between $2100 and $2800, with an increase of about 11% year to date. The price of Bitcoin has risen by 50% this year, reaching a peak of 74% at one point. The ETH/BTC ratio has continued to decline after the Ethereum merger and upgrade in 2022, with a drop of over 50%.

Steno Research's report suggests that Ethereum's performance in the previous bull market can provide some guidance. Ethereum surged during the Altcoin season at the time, and in less than two months, its value more than doubled compared to Bitcoin. The report states that this transformation is triggered by a surge in on chain activities, including decentralized finance (DeFi), stablecoin issuance, and the flourishing development of NFTs, all of which mainly occur on the Ethereum blockchain.

Steno stated that the Federal Reserve's interest rate cut earlier this week will lead to an increase in on chain activity, which will greatly benefit Ethereum. The research institution also believes that the performance of Bitcoin exchange traded funds (ETFs) is unlikely to continue to outperform Ethereum ETFs, and points out that Ethereum has shown the ability to suddenly outperform Bitcoin in the past.

There are three main reasons why Bitcoin has performed better than Ethereum recently. Mads Eberhardt, a senior cryptocurrency analyst at Steno, wrote:

The impact of US spot ETFs on Bitcoin and Ethereum, the continued buying pressure on MicroStrategy, and the significant decline in Ethereum trading revenue in recent months

Eberhardt stated, "Ethereum's active addresses remain strong, especially considering the increasing adoption of Rollups." He added that the network's transaction revenue appears to have bottomed out in August.

Eberhardt wrote on social media: "Lower interest rates ->More on chain activity ->Higher Ethereum trading revenue ->Lower ETH supply growth ->Higher ETH prices

Asset management company Bitwise is also optimistic about the prospects of Ethereum. The company stated in a report on Tuesday that "Ethereum appears to be a potential contrarian investment opportunity before the end of the year

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