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Key Takeaways
- Ethereum (ETH) is more volatile than Bitcoin, rallying higher during recent bull runs and falling harder during selloffs, losing 7.9% so far this year, compared to a 0.8% decline for Bitcoin (BTC) as of mid-December. 3.
- ETH offers staking income and blockchain uses that BTC lacks, but these features come with added risks, including regulatory uncertainty and the potential for smart contract hacks.
Bitcoin experienced one of its worst months since January 2021, shedding approximately 17.5% of its value in November based on closing prices, which helped drag the entire crypto market below $3 trillion in 2025. Ethereum performed even worse, dropping more than 22% last month and approximately 38% below its all-time daily closing high, which occurred in August. That’s not surprising. Ethereum tends to be more volatile than Bitcoin.
Both assets tend to move in the same direction, rising and falling with each other, interest rate fears, and broader risk sentiment. So does Ethereum actually offer more upside potential than Bitcoin—or just more volatility in both directions?
During the 2020 to 2021 bull run, Ethereum outperformed BTC each year, gaining approximately 310% compared to Bitcoin’s roughly 303% in 2020 and about 399% compared to Bitcoin’s approximately 60% in 2021. During that period, Ethereum was gaining market share due to its use in decentralized finance (DeFi) and popular NFT projects, such as CryptoPunks and Bored Ape Yacht Club.
Ethereum’s Recent Performance vs. Bitcoin’s
During another high point for crypto in 2023, Ethereum gained approximately 91% compared to Bitcoin’s 156%, as the Ethereum proof-of-stake upgrade and other changes made transactions cheaper on the platform.
And in the roughly six months since June 1, Ethereum has gained about 24% while Bitcoin slid nearly 12% despite a summer rally. Zoom out further, and it’s clear that Ethereum largely tracks the ups and downs of Bitcoin, though with greater swings. Additionally, Ethereum has declined by almost 15% over the past year, compared to Bitcoin’s 3.66% decline. And Ethereum has lost about 43% of its value since its all-time peak in 2021. Its relative value compared to Bitcoin has fallen by nearly two-thirds in that time.
What Ethereum Can Offer That Bitcoin Doesn’t
Bitcoin’s value proposition is supposed to be that of a digital gold. You buy it, hold it, and hope it gains in value—it has no other use and hasn’t been widely adopted as a means of exchange. Ethereum does far more as a system; running apps, powering NFT marketplaces, backing DeFi lending, and allowing those who hold it to earn passive income just by holding and staking ETH.
Approximately one-third (30%) of all Ethereum in circulation is staked, meaning holders have locked up their coins to help secure the network in exchange for yields, which have historically ranged from around 3% to 5% annually, but have dipped below 3% in 2025. A yield between 4% and 5% is about what you’d get from 30-year Treasurys.
Further, yield is something that Bitcoin doesn’t provide. By contrast, you can stake Ethereum directly, or use platforms like Lido that give you a token you can still trade—so your money isn’t tied up if you need it.
Ethereum is also getting cheaper to use with so-called Layer 2 networks—basically, add-on grids that handle heavy traffic to cut costs.
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The Extra Risks of Ethereum Over Bitcoin
The value of Ethereum’s network comes with a catch. The sprawling ecosystem creates more avenues for hackers to attack. The DeFi platform Yearn Finance reported a $9 million hack that drained funds from its users.
There are also additional regulatory risks with Ethereum. Bitcoin has broadly been accepted as a commodity, but Ethereum’s status has been more of a moving target. During its 2014 initial coin offering, regulators at first considered Ethereum a security. The Securities and Exchange Commission later reversed that position, arguing that the network had become sufficiently decentralized. Still, without permanent guidelines, it could be reclassified, potentially shifting Ethereum’s operations overnight.
Finally, there’s competition. Ethereum’s average transaction fee has dipped below 30 cents in recent days, while rivals like Solana cost far less.
The Bottom Line
Ethereum has been more volatile than Bitcoin, which itself has swung dramatically over time. That means bigger rallies and bigger crashes, sometimes in the same year. If you’re a short-term trader looking to capitalize on swings, Ethereum has offered more room to run in either direction recently. But volatility isn’t the same as long-term outperformance. Since 2021, Ethereum has actually lost almost two-thirds of its value relative to Bitcoin, meaning patient holders would have been better off in BTC.
What Ethereum does offer is more options than just hoping the price goes up. You can stake it for yield, use it as collateral in DeFi, or bet on its ecosystem growing faster than Bitcoin’s. Those are real advantages, but they come bundled with regulatory uncertainty, hacking risks, and competition from cheaper blockchain systems.