Review of ETH Beta returns under ETF narrative: MEME performs best and collectively cannot beat Bitcoin

Compiled by: Felix, PANews

There is a lot of discussion around long ETH beta (referring to altcoins in the Ethereum ecosystem) trading. Most people believe that with the smooth passage of the ETH ETF, ETH will rise again, thereby opening up the ETH beta. Room for upside. While this is a logical idea, does the data support it?

Research data from research institution ASXN shows that during the observation period, ETH beta underperformed ETH in both absolute value and risk-adjusted terms. Furthermore, with the exception of SOL and ENS, all observed coins underperformed BTC on a relative and risk-adjusted basis. The performance of assets in different cycles varies even more, and altcoins generally perform poorly in this cycle. Asset selection is more important than ever.

Prerequisites:

• Observation period is from May 1st to July 23rd, 2024. The odds of ETF approval were revised on May 6, so “ETH ETF” trading has been at the center of market talk ever since.
• Past performance is not indicative of future performance.
• Asset Selection: Assets have been classified and price performance has been averaged with equal weight. A few representative altcoins have been selected here, but changing this portfolio could significantly affect the overall results (such as adding PEPE).

YTD (Year to Date):

Memecoins are the only track to outperform ETH so far this year, thanks in large part to the exceptional liquidity brought about by the memecoin craze, Although this liquidity lasted relatively short-lived on the Ethereum mainnet. Alt L1, ETH DeFi and L2 performed worse than ETH, with L2 performing the worst.

May 1st to July 23rd:

A closer look at the performance of each track and asset during this period reveals the same trend: all tracks performed lower than ETH, including memes currency. Similar to the year-to-date situation, L2s is the worst performer. Interestingly, ENS performed well, with a return of 77%. During this period, the top three assets were ENS (+77%), SOL (+32%), and ETH (+15%).

Given their relationship to ETH, L2 and DeFi have a stronger fit with ETH beta than memecoins or Alt L1. A deeper dive into the sector’s individual asset performance reveals that no L2s have outperformed ETH during this period. On average, L2s are down 36%, with the gap between the best performing L2 (Matic) and ETH being 40%, which is a significant difference.

Compared to ETH, DeFi performed slightly better, with the average return of DeFi being +11.32% during the observation period. However, this performance was mainly boosted by ENS, with the average performance excluding ENS being -4.33%. Among all L2 and DeFi, the only asset that performed better than ETH was ENS, and AAVE's return rate was also considerable, only 4% lower than ETH.

The above is the detailed content of Review of ETH Beta returns under ETF narrative: MEME performs best and collectively cannot beat Bitcoin. For more information, please follow other related articles on the PHP Chinese website!