The ascent of Ethereum is gaining momentum, transforming the once far-fetched idea of it surpassing Bitcoin in price into what now seems inevitable. While Bitcoin remains the standard for digital gold, Ethereum is establishing itself as the foundation of the emerging digital economy.
Why ETH’s Dominance Might Surpass Bitcoin This Cycle
Despite Bitcoin’s long-standing title as digital gold, Ethereum could soon surpass BTC in both market capitalization and pricing. Analyst Stitch on X has revealed that Ethereum’s monetary policy is key in this potential shift.
Related Reading: All-Time High for Crypto Market: Ethereum Leads the Way Above $4,000
One pivotal reason ETH might challenge BTC is the difference in their supply dynamics. Bitcoin has a capped supply of 21 million coins, while Ethereum has approximately 120 million coins in circulation and no fixed limit. However, Ethereum’s unique burn model, EIP-1559, gives it a distinct advantage.
The EIP-1559 burn mechanism was incorporated during the London upgrade in 2021, permanently eliminating a part of every transaction fee from circulation, thus rendering ETH effectively deflationary.
Increased activity on the Ethereum network leads to more ETH being burned, resulting in a scenario where the destruction of ETH surpasses its creation. Since the upgrade, around 4.6 million ETH, valued at approximately $13 billion, has been burned, and new ETH issuance has plummeted by 88%.
For Ethereum to surpass Bitcoin in both price and market cap, several conditions must align. The first factor noted by experts is significant institutional inflows that can outstrip supply dynamics due to the burn mechanism, propelling prices and demand higher. Additionally, increased network activity leads to higher transaction volumes, which means more ETH is burned and supply tightens.
The reduced circulating supply from ETH staking as validators decreases the available liquid supply on the market, creating upward pressure on prices. Since May 2025, Ethereum has continuously been deflationary, meaning more ETH is destroyed than issued.
The Divergence Between Bitcoin and Ethereum
Historically, Ethereum tends to outperform shortly after Bitcoin market peaks. Mercury has pointed out that after Bitcoin peaked in 2017, it subsequently dropped nearly -47%, while Ethereum surged by 100% within the following 30 days.
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In 2021, Bitcoin also peaked and saw a -27% drop, but Ethereum managed to rally 83% within the same timeframe. In 2025, Bitcoin exhibits signs of structural weakness, losing higher-timeframe trends while forming lower lows and lower highs.
Conversely, Ethereum shows resilience, maintaining its higher-timeframe uptrend and continuing to form higher lows and higher highs on the daily chart. This divergence is significant, indicating Ethereum’s strength while Bitcoin falters.
The ETH/BTC pair further supports this narrative. Just 17 days ago, Ethereum broke a 944-day downtrend that reflected a -75% underperformance compared to Bitcoin. Reclaiming this trend signals that ETH is gaining back its dominance in the crypto landscape.
Featured image from iStock, chart from Tradingview.com
