There is an altcoin that has outperformed Bitcoin (BTCUSD) in every cycle and may be about to do the same once again. We are already seeing signs of this, as it has started to close the gap, but more gains seem likely to come, with analysts highly optimistic.

That altcoin is Ethereum (ETHUSD). It is the most well-known altcoin, and the blockchain is home to hundreds of thousands of other altcoins, stablecoins, and non-fungible tokens. Ethereum has the most staying power after Bitcoin, specifically because it is the most trusted Web3 chain. If you believe Web3 is the future, ETH is difficult to ignore.

Standard Chartered's global head of digital assets research, Geoffrey Kendrick, says ETH and affiliated companies are "cheap" at the moment.

Why Analysts Think Ethereum Remains Cheap

Kendrick has a strong rationale behind it. The analyst pointed out that Ethereum-based digital asset treasury (DAT) companies have been ceaselessly buying up supply in the past few months. They have so far bought 2.6% of all ETH in supply since June. Another 2.3% has been bought by spot Ethereum ETFs.

This means 4.9% of ETH has been scooped up from the markets in less than three months. To put that into perspective, let's extrapolate it.

If the current rate of buying continues, the market would have to buy another 19.6% of Ethereum's circulating supply in the next 12 months. Of course, this is highly speculative, but trying to buy even 10% of all the ETH in the market over the next year will lead to demand massively outstripping the sell side of the order book.

Around 29.64% of all ETH is staked. Another 2-3% is locked in DeFi collateral, and 9% is already in ETF and corporate treasuries. Add in the "HODL-ers," and you have the perfect recipe for the asking price of ETH to continue going up on exchanges.

On the Cusp of Explosive Gains?

Another yardstick that is flashing green is the relative value of Ethereum compared to Bitcoin. Historical performance has been more or less aligned, with ETH outperforming BTC during peak mania and having higher drawdowns during peak pessimism.

However, Bitcoin diverged and outperformed starting in late 2023. BTC widened the gap significantly. Many with no previous experience with crypto only knew Bitcoin and bought it easily through spot ETFs. Ethereum's spot ETF was approved a couple of months later, but most investors were fascinated with Bitcoin's gains, giving them no incentive to pay attention to Ethereum.

Things have since changed. BTC has returned ~32% in the past six months, compared to ETH's 103.2%. And even with this gain, Ethereum is behind. During late 2021, 1 ETH could buy you 0.086 BTC. ETH needs to be at $9,475 today to do the same. During the 2017 altseason, 1 ETH could buy 0.147 BTC.

Time to Buy ETH?

I agree with the analyst that Ethereum remains cheap at current levels, though an altseason is not a guarantee. Investors are in a "wait and see" environment, since the next few months will demonstrate if alts will ever be able to challenge Bitcoin's dominance like they used to. If the buying pressure keeps up, ETH can keep up. Ethereum remains a buy for me. I expect it to hit $10,000 sometime in 2026.