We are finished talking about the uptrend of Ethereum. This week, as the crypto market woke up, Ether hit new ATHs. The latest is today where it reached $ 2,750. A question that keeps coming back: Will Ethereum ever surpass Bitcoin?
Before getting to the heart of the matter, we want to clarify an important point: the capitalization of the two cryptos. The market cap of BTC currently stands at 988.28 billion dollars while that of Ether is at 316.24 billion dollars or roughly less than a third of that of BTC.
Despite this gap between the two assets, the idea that Ether dethrones crypto from Satoshi is supported by more than one. Three analysts have delivered to the American newspaper Business Market Insider, the reasons why the assumption could turn out to be true.
Reason 1: The potential of Ethereum
The Ethereum blockchain provides a computer protocol facilitating the creation of smart contracts, decentralized applications (DApps), decentralized finance applications (DeFi6 and non-fungible tokens also called NFT. Instead of being only an asset to speculative value, she permits scalability other projects in the crypto industry. For example, Chainlink, one of the flagship initiatives of decentralized finance, is already part of the Top 20 cryptos.
Ava labs president John Wu agrees with the asset’s potential. He stated:
“Utility will eventually trump a store of value, but I think that’s a bit far. We have to thank bitcoin for being the first to generate interest. But on etherum there is a lot of development – DeFi and NFT. Ultimately, we move beyond the unique storage value functionality that is bitcoin and enter a world where there are more use cases – and that always trumps a single function that is an asset or a storage value. ”
There may be a concern regarding the aspects mentioned on Ethereum: Ether network congestion and transaction fees. Which means that other blockchains are in the process of nabbing a good number of customers. Solana, Cardano, Polygon compete quite harshly with Ethereum. Despite everything, he has a fairly considerable lead.
Reason 2: BTC is overvalued
The industry has to thank Bitcoin a lot for bringing investors’ attention to the crypto industry. Therefore, as a pioneer in the sector, he enjoys his seniority which has earned him enormous appreciation from investors. So, for some, the appreciation of Bitcoin would be too much and the asset is overestimated.
Ian Balina, Founder and CEO of Token Metrics argues that:
We think bitcoin is overpriced. We believe bitcoin has had the first-mover advantage. But in terms of long-term technology, we think ethereum will overtake bitcoin because if you look at developers, all developers pretty much use ethereum. Ethereum has 10 times more monthly active developers than bitcoin. Bitcoin is really now, purely, in my opinion, just worth digital storage, digital gold, and I see ethereum as the next internet like Web3.
Reason 3: Regulation might not have too much effect on Ether
It is often said that one of the brakes to the growth of cryptocurrencies is regulation. Not wrongly, because it will weaken the essence of cryptocurrencies namely decentralization and anonymity. However Justin Chuh, a senior trader at Wave Financial, believes that:
The usual fear, uncertainty and doubt may arise out of nowhere and hit the crypto class as a whole, but some assets will be able to decouple from the downside simply because market participants don’t care or see. current news have a long-term impact, likely due to their faith in the underlying technology. Governments proposing a capital gains tax increase are not making blockchain technology any less desirable.