The Future Of Crypto: Is Ethereum overtaking Bitcoin?
If you’ve heard of Bitcoin, you’ve likely heard about Ethereum as well. These are the two most widely used cryptocurrencies. Bitcoin had such early market domination as the first cryptocurrency that it practically became unique to cryptocurrencies. It came to the point where some people could alternately use the terms Bitcoin and cryptocurrency to indicate the same thing.
Ether, the world’s second most valuable cryptocurrency, has been hitting new highs ahead of a big update to its underlying platform, Ethereum.
Could Ethereum overtake Bitcoin?
From the market cap difference, it’s easy to assume that this is not possible. However, if you look at the market share changes, then you understand the viability.
Ether takes advantage of the adoption of blockchain technology by fintech companies and in particular the popularity of the so-called. irreplaceable tokens.
Bitcoin may be the most popular cryptocurrency. But token investors are also aware that they need to keep an eye on the ether, which has dramatically surpassed its more volatile cousin in 2021 – a trend that could continue into 2022, Bloomberg reports.
The Bloomberg chart shows the movement of bitcoin against the dollar on a logarithmic scale, reflecting the last five years and measuring the acceleration of cryptocurrency while taking into account its volatility. After reaching its price peak in 2017, bitcoin is largely trading with pronounced volatility.
This same volatility associated with the US presidential election is boosting the token, which is then accelerating as traders take risks as the first coronavirus vaccine is launched in early November 2020. For some time, bitcoin has shown a positive correlation. with the S&P 500 index, emerging market securities, and even commodities as a measure of inflation. However, after declaring a 516 percent return in less than six months, his momentum slowed.
These days, cryptocurrency is facing fewer and more fluctuations. The small volume on Tuesday, for example, would traditionally cause strong movement, but the price of bitcoin fell by only 6.7%, or less than two standard deviations. In the first half of the year, the cryptocurrency exceeded this threshold more than three times more often than in the second half, mainly due to retail trade and regulatory risk.
“Many traders have amassed money in 2021 and are waiting to take their profits by the end of the year to defer tax payments until 2023,” commented Sergio Silva, sales director at Fireblocks. “This is another source of pressure on sales, which could escalate into further weakness in January,” he added.
The more notable growths this year, however, belong to the ether, the symbol of the Ethereum network. The token benefits from the adoption of blockchain technology by fintech companies and in particular from the popularity of the so-called irreplaceable tokens (NFT) in the gaming computer world. Measuring the superiority of ether over bitcoin, taking into account volatility, shows that its value has risen to levels last observed in the summer of 2018.
“It remains unclear to the world at large, to the general public, that what is really happening with bitcoin, with the ether, with this whole bunch of technology … is really a revolution in software development,” said Coin list CEO Graham Jenkin in an interview with Bloomberg. “Blockchain technology is a whole new way to build software,” he added.
So, will eventually Ethereum overtake Bitcoin?
All signs point to a more useful Ethereum ultimately taking the place of Bitcoin. This, however, will take time. While Bitcoin continues to dominate the market, Ethereum faces competition from other cryptocurrencies with comparable operating networks.
