Why Ethereum is “on track” to overtake Bitcoin’s market cap
Bitcoin and ethereum saw their rivalry intensify in 2021 as the battle for cryptocurrency dominance intensifies.
The price of bitcoin has almost quadrupled in the past 12 months, however, the price of Ethereum has climbed 1000% over the same period, closing the (still large) gap between the two largest market caps. cryptocurrencies.
Now, as memes-based dogecoin moves closer to the biggest cryptocurrencies, another closely watched analyst has predicted that Ethereum could eventually eclipse bitcoin.
“Highlighting the benefits of diversification, especially in such an emerging asset class as cryptos, the trend that appears to be lasting is for Ethereum to gain market share over bitcoin,” wrote Mike McGlone, senior materials strategist. first at Bloomberg, in its latest report, indicating that Ethereum volume was a leading indicator of the progress of ethereum “—now at” the 50% mark against bitcoin in terms of market capitalization. “
Ethereum’s 10-day average trading volume has doubled to 80% of bitcoin since the start of 2021, according to McGlone, citing data from CoinMarketCap.
“Both [bitcoin and ethereum] have bullish foundations, but the foundation and use case of [ethereum] is a strong complement to the more macro attributes of the store of value of [bitcoin]”McGlone wrote.
Ethereum has skyrocketed over the past year as the popularity of decentralized finance (DeFi) – using cryptocurrency technology to recreate traditional banking products such as loans and insurance and built on the blockchain of ‘Ethereum – rose. Meanwhile, the craze for the NFT (non-fungible token) that allows all kinds of memes, digital artwork, tweets, and YouTube videos to be sold through Ethereum’s blockchain has grown further. the price of Ethereum.
Elsewhere, investors continued to pump money into Ethereum investment products, such as the popular Grayscale Ethereum Trust, this week. Such investment vehicles allow exposure to ethereum in the form of a security while avoiding the challenges of buying it directly.
Ethereum continues to see entries in investment products totaling $ 33 million [over the last week], remaining the altcoin of choice for investors, ”analysts at Jersey-based digital asset investment firm CoinShares wrote in their latest report on digital asset fund flows.
As bitcoin is almost undisputed as an emerging store of value and a form of digital gold, McGlone warns that a large number of Ethereum’s rivals looking to gain market share face an uphill battle against a trader. well-established history.
Ethereum faces competition from other crypto-asset and smart contract platforms, but number two in crypto has won the adoption race as the benchmark for the digitalization of money and finance “McGlone wrote.
This week, reports have revealed that ethereum challenger solana, a blockchain backed by bitcoin and the FTX crypto exchange, could raise as much as $ 300 million and $ 450 million to pursue its ambitions.