In September 2021, a notable survey revealed that Ethereum (ETH) was the top cryptocurrency expected to rise among users of a major exchange platform. This article explores Ethereum's trading trends from 2020 to 2021, comparing them directly with Bitcoin (BTC) to provide valuable insights for traders and investors.
Understanding the Survey Results
The survey, conducted in late 2021, asked participants which cryptocurrency they believed had the most potential for price appreciation. Ethereum emerged as the clear favorite, indicating strong investor confidence in its future performance. This sentiment is particularly interesting when examined against actual trading data from the same period.
Ethereum vs. Bitcoin: Yearly Trading Comparison
When analyzing trading volumes, we use a ratio comparing Ethereum's trading volume to Bitcoin's (with Bitcoin set at 100%). This "Bitcoin ratio" helps standardize comparisons and reveal meaningful patterns.
2020 Trading Performance
In 2020, Ethereum's trading volume ratio stood at 15% of Bitcoin's. This indicates that while Ethereum was already established as a major cryptocurrency, it still significantly trailed Bitcoin in terms of trading activity throughout most of the year.
2021 Trading Performance
The following year marked a dramatic shift. Ethereum's trading ratio surged to 53% of Bitcoin's volume—more than triple its 2020 performance. This substantial increase demonstrates growing trader interest and market confidence in Ethereum as a complementary asset to Bitcoin.
Monthly Trading Trends Analysis
Breaking down the data monthly reveals even more nuanced patterns in cryptocurrency trading behavior.
2020 Monthly Breakdown
Throughout 2020, Ethereum's trading ratio fluctuated between 8% (May) and 25% (November). The lower spring values and higher autumn figures suggest seasonal patterns or response to specific market developments that affected trader preferences between these two major cryptocurrencies.
2021 Monthly Breakdown
The 2021 data shows significantly higher ratios across all months compared to the previous year. The lowest point was 30% in March, while May and September both reached impressive peaks of 85%—meaning Ethereum's trading volume nearly matched Bitcoin's during these periods.
This consistent elevation throughout 2021 indicates a structural shift in market dynamics rather than temporary fluctuations. The data suggests Ethereum was gaining substantial traction as both a trading asset and investment vehicle.
Implications for Crypto Traders
The growing trading volume ratio between Ethereum and Bitcoin signals several important market developments:
- Portfolio diversification: Traders are increasingly viewing Ethereum as a core holding alongside Bitcoin
- Market maturation: The cryptocurrency ecosystem is expanding beyond Bitcoin dominance
- Technology appreciation: Ethereum's utility through smart contracts and dApps is gaining recognition
- Trading opportunities: The changing ratio creates new arbitrage and timing possibilities
For active traders, monitoring these ratio fluctuations can provide valuable signals for entry and exit points across both cryptocurrencies.
Future Outlook and Considerations
While past performance doesn't guarantee future results, the established trend of growing Ethereum trading volume relative to Bitcoin suggests continued interest in the cryptocurrency. Several factors could influence this ratio moving forward:
- Ethereum's ongoing technological upgrades and transition to proof-of-stake
- Bitcoin's role as "digital gold" versus Ethereum's "digital oil" utility narrative
- Broader adoption of decentralized applications built on Ethereum
- Institutional investment patterns shifting toward broader crypto exposure
Traders should monitor these developments while maintaining a diversified approach to cryptocurrency investments.
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Frequently Asked Questions
What does the Bitcoin ratio measure?
The Bitcoin ratio compares another cryptocurrency's trading volume to Bitcoin's, with Bitcoin standardized at 100%. This helps contextualize trading activity across different cryptocurrencies regardless of absolute price differences.
Why did Ethereum's trading ratio increase so significantly in 2021?
Multiple factors contributed including growing DeFi adoption, NFT market expansion, institutional interest, and anticipation of Ethereum's network upgrades. These developments increased both utility and speculative interest in ETH.
Should traders use this ratio for decision making?
While helpful context, the ratio shouldn't be used in isolation. Combine it with fundamental analysis, technical indicators, and market sentiment for comprehensive trading decisions.
Does a higher ratio always indicate stronger performance?
Not necessarily. While generally positive for the measured cryptocurrency, extremely high ratios might indicate overconcentration or bubble conditions in specific cases.
How often should traders monitor these ratios?
Regular monitoring provides valuable context, but daily checking may lead to overtrading. Weekly or monthly review often better supports strategic decision-making.
Can this ratio approach or exceed 100%?
Yes, particularly during periods of intense altcoin seasons or when specific developments disproportionately affect one cryptocurrency versus another.
Conclusion
The comparative analysis between Ethereum and Bitcoin trading volumes reveals significant shifts in market dynamics throughout 2020-2021. Ethereum's growing trading ratio demonstrates its increasing importance within cryptocurrency portfolios and suggests continued evolution of the digital asset landscape.
While Bitcoin remains the dominant cryptocurrency by market capitalization, Ethereum has established itself as a strong secondary player with distinct value propositions. Traders and investors should consider both assets within their strategies while monitoring the evolving relationship between these two market leaders.
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Remember that all trading involves risk, and past performance doesn't guarantee future results. Conduct thorough research and consider your risk tolerance before making any investment decisions. The cryptocurrency market remains volatile, and ratios can change rapidly based on market conditions and developments.