Ethereum (ETH) Price: Could 2026 Be the Year ETH Finally Catches Bitcoin?

TLDR

• Ethereum has gained 160% since 2023 but trails Bitcoin’s 457% return during the same period.
• Bitcoin dominance dropped from 66% in July, while the ETH/BTC ratio rose 3.59% year-to-date, suggesting capital rotation toward altcoins.
• Ethereum daily transactions grew 6.8% to 2.05 million in 2026, with a 31% spike since mid-December.
• New Ethereum wallet creation hit record highs with an average of 327,000 wallets created daily over the past week.
• The December Fusaka upgrade reduced fees and improved data handling, while over 77 million ETH is now staked in validator contracts.

Ethereum’s performance has lagged behind Bitcoin for years, but recent market shifts and network activity suggest this could change in 2026. The second-largest cryptocurrency by market cap has delivered 160% gains since 2023, while Bitcoin posted returns of 457% during the same timeframe.

Bitcoin’s market dominance peaked at 66% in July before trending downward. This decline points to investors moving capital into alternative cryptocurrencies. The ETH/BTC ratio, which tracks Ethereum’s price performance against Bitcoin, has climbed 3.59% year-to-date.

Jimmy Xue, co-founder and COO of quantitative yield protocol Axis, says a rising ETH/BTC ratio combined with falling Bitcoin dominance has historically marked the beginning of altcoin season. Investors appear to be seeking higher returns in the Ethereum ecosystem after the Bitcoin ETF market stabilized.

Shivam Thakral, CEO of Indian exchange BuyUCoin, describes the current market movement as capital rotation rather than Bitcoin weakness. This type of rotation often comes before rallies in Ethereum and large-cap altcoins.

Prediction markets show mixed sentiment about an altcoin rally. Users on Myriad platform assign just 19% probability to an alt season starting before April 2026.

Network Activity Reaches New Heights

Transaction volume on the Ethereum network provides concrete evidence of growing adoption. Daily transactions increased 6.8% to 2.05 million in 2026. The network saw a 31% jump in transactions since mid-December.

Wallet creation reached historic levels over the past week. An average of 327,000 new wallets were created each day. Sunday set a single-day record with over 393,000 new wallets created.

The total number of non-empty Ethereum wallets now stands at 172.9 million, an all-time high. New wallets typically signal fresh users, developers, or institutions entering the ecosystem.

Ether currently trades at $3,330, up 7.5% in the last 24 hours. The price ranged between $3,068 and $3,292 over the past week.

Upgrades and Staking Drive Growth

The Fusaka upgrade in December made significant improvements to the network. The update reduced fees and improved data handling on-chain. It also cut costs for posting information from Layer 2 networks back to Ethereum.

These changes made interacting with applications and rollups smoother, encouraging new users to create wallets and use the network.

Market sentiment shifted from negative to neutral and positive in mid-December, according to Santiment analysts. This shift typically coincides with more retail users creating addresses.

Stablecoin transfers on Ethereum spiked in late 2025, showing the network was actively used for payments and settlements. This real financial activity attracts new participants who need wallets to send, receive, or hold tokens.

More than 77 million ETH is now locked in the ETH2 Beacon Deposit Contract, representing validator stake deposits that secure the network. Exchange Binance holds nearly 4 million Ether on behalf of users, while Coinbase holds around 2.3 million.

Thakral points to several factors supporting potential outperformance: increased demand from exchange-traded funds, Layer 2 adoption, fee burn dynamics, restaking growth, and renewed DeFi activity. Ethereum’s year-to-date return of 11% already exceeds Bitcoin’s 8.5%.

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