Raoul Pal, market veteran and CEO of Real Vision, recently expressed his belief that the Donald Trump victory could help Ethereum outperform Bitcoin.
His commentary follows a period in which Ethereum has trailed Bitcoin, marking five straight months of losses against BTC since mid-2024. Currently, ETH trades at 0.03829 BTC, down approximately 29% year-to-date against Bitcoin.
Bitcoin has shown a better performance since Q3 2023. However, Ethereum appears to be gaining ground in recent times, having increased 7.06% against Bitcoin in November. This recovery comes despite Bitcoin’s recent spike to a new ATH.
In a post earlier this morning, Pal suggested that he sees Trump’s victory as an opportunity for Ethereum to shift the trend to its favor. He identified two key reasons this new administration could allow Ethereum to begin outpacing Bitcoin.
Ethereum Could Leverage Yield in DeFi
The first reason is the potential for utility tokens in DeFi to begin offering yield or rewards based on the underlying network. According to Pal, the new regulatory environment could enable more yield opportunities within Ethereum’s DeFi ecosystem.
As Ethereum has the largest share of DeFi applications, it stands to gain more than other blockchains if regulatory clarity permits these financial innovations to flourish. This is likely to enhance its network value and price growth, allowing it to outpace Bitcoin.
Ethereum as the Preferred Blockchain for TradFi
The second factor is Ethereum’s established position as a reliable and widely adopted blockchain, which could make it the platform of choice for traditional finance (TradFi) institutions looking to build out larger blockchain-based applications.
With Trump’s election likely bringing a shift toward pro-crypto regulations, Pal expects Ethereum to serve as the backbone for TradFi projects seeking a tested and scalable network.
He likens Ethereum’s position to that of Microsoft in the early days of web enterprise solutions, noting that Ethereum has the familiarity and credibility to present itself as the “safe” choice for institutions exploring blockchain integration.
While Pal is optimistic, he admits Ethereum might not be the biggest beneficiary of the new Trump administration. Competing blockchains like Solana (SOL) and Sui (SUI) are gaining traction, especially among users seeking lower fees.
Pal argued that Ethereum could underperform against a newer project like SUI, which is in an early, high-growth phase. He also admitted that Solana is also in a better position to outperform Ethereum.
“Trump’s Victory Might Benefit Altcoins More”
Market analysts like Bitwise’s Matt Hougan and pundit Alex Kruger have shared similar thoughts on regulatory clarity, noting that while Bitcoin enjoyed some regulatory assurance under the Biden administration, Ethereum and other altcoins faced more uncertainty.
Trump’s victory could create a more favorable environment for these altcoins. This change might allow institutions, that were once wary of altcoins due to potential regulatory implications, to decide to enter the market when there is sufficient clarity.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
