Bitcoin’s long-awaited charge towards its all-time high may have finally materialised but, despite this recent surge, it isn’t even the best performing digital asset this week.

Bulls remain firmly in control, at least when it comes to large cap assets, with Bitcoin surging through the $15,000 level to trade up almost 10 percent month-to-date already. Despite the recent stellar gains, Bitcoin’s year-to-date (YTD) returns are half of that achieved by Ethereum which is up 215 percent YTD vs Bitcoin’s 109 percent. This upside, however, is seemingly limited to large cap assets.

wData from MVIS shows the MTD large cap index is up 7 percent while  small caps are only up 1.4 percent. Capital rotation out of alt-coins has been such that the small cap index is up a mere 17 percent YTD, after having been up 100 percent in September (largely on the back of the short-lived DeFi boom), whilst the large-cap index is up 100 percent YTD.

However, what is particularly notable about the surge higher by Bitcoin is the limited nature of incremental changes in the futures aggregate open interest (OI). To wit, while the OI did rise to $5.4 billion, it only matched record highs achieved in late October. 

At the same time, the OI on the CME has been steady since late October at around $800 million, which suggests that, while so-called FOMO that has seen an influx of retail flow, the regulated entities that operate in the current ecosystem have taken a more pragmatic approach to the current FOMO. This isn’t to say that there is no evidence of bullish positioning, in fact there is plenty – Bitcoin and Ethereum’s skew profiles have both shifted aggressively lower this week, and Bitcoin’s options OI rose to a new high of just under $3 billion.

Bullish sentiment was also evident across global equity markets despite mounting concerns that Donald Trump  has aggressively sought to undermine election results when they are finalised. The president’s campaign has already filed multiple lawsuits in critical swing states, including Pennsylvania and Georgia, and Mr Trump has also called for a recount in Wisconsin. Attention on the US elections has been so intense that it even overshadowed an important announcement that Ethereum 2.0’s deposit contract went live, which, despite a rather delayed reaction by market participants, eventually resulted in an aggressive rally by Ethereum through the $400 level.

Genesis time for Eth 2.0 was first set for January 3, the 12th anniversary of the launch of the Bitcoin network. The date has been moved, GitHub files show, to December 1. Staking rewards are reasonably high compared to other investments coming in between eight and 15 percent annually. Block rewards are calculated using a sliding scale based on the total amount of ETH staked on the network. Said otherwise, if the total amount of ETH staked is low, the reward (interest rate) is high, but as the total stake rises, the reward (interest) paid out to each validator starts to fall. Naturally, this development is very bullish for Ethereum, but it also supports the broader ecosystem and, in particular DeFi, as well as DEX-related tokens. 

This is especially the case, given the recent slide in valuations, with the likes of Uniswap and many others posting heavy losses in the wake of much more contained activity across DEXes. 

The question is: does Bitcoin continue to outperform or does some capital rotate into Ethereum and the DeFi/DEX ecosystem? One needs only to wait for another wave of demand for lending and leverage in order to find out.