Challenging Bitcoin's Dominance: Ethereum's Evolving Market Influence Post-Berlin Upgrade

Abstract

This study examines whether Ethereum’s market-wide influence strengthened relative to Bitcoin following the Ethereum Berlin upgrade in April 2021. Using one-minute Binance spot data for Bitcoin, Ethereum, and major large-cap cryptocurrencies, we estimate Granger-causality tests and vector autoregressions around the upgrade. The results suggest that Bitcoin retained its benchmark role, but Ethereum’s marginal contribution to short-horizon price discovery increased after Berlin. This shift is especially evident in high-liquidity states, where lagged Ethereum returns became stronger predictors of Bitcoin and other large-cap cryptocurrency returns. The evidence indicates that protocol-level developments may alter the hierarchy of information transmission in crypto markets at the margin, without overturning Bitcoin’s broader benchmark status.