Cryptocurrency Shakeout Kindles Debate on Ethereum’s Shot at Overtaking Bitcoin

- Advertisement -

The relative resilience of the second-largest cryptocurrency by market capitalization, Ethereum, in May’s cryptocurrency rout has put the spotlight back on the idea that it could one day overtake Bitcoin by market value.

Right now, Bitcoin is more than twice as big as Ether but in May, the gap narrowed by about $350 billion, courtesy of one of Bitcoin’s worst drops and a smaller retreat in Ether. Ethereum supporters cite its popularity for blockchain-based financial services and digital collectables, as well as an ongoing upgrade to boost the efficiency of the affiliated Ethereum network.

Ether “will likely exceed Bitcoin at some point in the future, as Ethereum will be superior when it comes to innovation and developer interest,” said Tegan Kline, co-founder of blockchain software company Edge & Node, according to Bloomberg. But she also informed that investors should be allocating capital to both tokens.

- Advertisement - NameCheap [CPS] WW

The speed of change in the crypto sector makes predictions dangerous. Even so, star investor Cathie Wood and Goldman Sachs Group Inc. strategists are among those who highlighted Ether’s potential recently. More broadly, interest in virtual currencies has expanded out beyond Bitcoin. According to data from CoinGecko, Bitcoin’s share of $1.6 trillion in total crypto market value is down to 42% from about 70% going into 2021.

Ether has been more resilient in May's crypto rout
Ether has been more resilient in May’s crypto rout.
Image: Bloomberg

In a report last week, Goldman commodity strategists Mikhail Sprogis and Jeff Currie wrote that Bitcoin’s first-mover advantage appears “fragile,” adding there’s a high chance it will “eventually lose its crown as the dominant digital store of value to another cryptocurrency with greater practical use and technological agility.”

- Advertisement -

They said Ether seems the most likely candidate to surpass Bitcoin while adding the rider that such an “outcome is far from certain.” They also said that Ether’s annual supply growth is capped, which aids its credentials as a store of value.

‘Growth Story’

Pat LaVecchia, chief executive of crypto broker Oasis Pro Markets LLC, argues Ether is starting to be viewed “as a better growth story” for the long term.

- Advertisement - Best Buy US

Bitcoin is down some 37% in May, one of its worst monthly slumps ever, while Ether is down about 11%. As of 8:27 a.m. in London, according to Bloomberg, the largest token retreated 1% to $35,750 and Ether was little changed at $2,447. Virtual currencies have been under pressure after Elon Musk criticized Bitcoin’s energy profile and China stepped up regulatory rhetoric.

For some, Bitcoin will not give up its top spot to any rivals, not least because of the sheer amount of attention it gets. For instance, Andrew Kiguel, chief executive of Tokens.com, argues Bitcoin has “the best outside validation signals” given how institutions and tycoons like Musk keep talking about it.

“Bitcoin will still remain king of the cryptos,” said Edward Moya, senior market analyst at Oanda Corp. “Bitcoin had too big of a lead for Ethereum to catch and has one major advantage, a fixed supply of only 21 million coins.”

Ether is up more than 900% over the past year, exceeding Bitcoin’s 275% climb. Given the huge gains, the debate on what crypto insiders call “the flippening” — a future where Ether’s value overtakes Bitcoin — will likely stay alive for a while yet.

SOURCE

- Advertisement - Wondershare WW
Lenovo India [CPS] IN
Redwolf [CPS] IN

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Related Articles

Domino's [CPS] IN

More To Consider

NordVPN WW

Stay Connected

13,642FansLike
62FollowersFollow
110FollowersFollow
Boat Lifestyle [CPS] IN

Hot Topics

TataCliq [CPS] IN

Latest Articles

Harman Audio [CPS] IN

Trending

Redmagic WW

Featured

Adblocker detected! Please consider reading this notice.

We've detected that you are using AdBlock Plus or some other adblocking software which is preventing the page from fully loading.

We don't have any banner, Flash, animation, obnoxious sound, or popup ad. We do not implement these annoying types of ads!

We need money to operate the site, and almost all of it comes from our online advertising.

Please add yourdomain.com to your ad blocking whitelist or disable your adblocking software.

×