- No products in the cart.
BEST SELLING PRODUCTS
“Ethereum’s ascent to the top of the cryptoverse seems unstoppable,” declared Nigel Green in mid-August, and it’s not hard to see why the deVere CEO thinks this. DeFi is on a tear, NFTs are mushrooming, Ethereum (ETH) remains more scalable than Bitcoin (BTC) and it also offers more uses including smart contracts. Moreover, Ethereum will soon move to a proof-of-stake (PoS) consensus algorithm, looking to be more eco-friendly than Bitcoin’s energy-intensive proof-of-work (PoW) protocol.
“Ethereum is already years ahead of Bitcoin in everything but price and fame,” said Green earlier this year, adding: “There’s a real sense that 2021 is the year for Ether. Its time has come.” But, is it really a foregone conclusion that the world’s first, largest and best-known cryptocurrency is ready to relinquish its market-cap crown? Maybe not.
“If you look at CoinMarketCap’s homepage over the past five years, Ethereum is usually sitting in second position, right under Bitcoin — and it really hasn’t moved from that number two spot in any permanent way since its launch,” Molly Jane Zuckerman, content lead at CoinMarketCap, told Cointelegraph, adding: “History shows us that there is only one cryptocurrency that can ever claim the ‘king of the cryptoverse’ title.”
So, is there a chance for a flippening — the term often used to describe a reversal of ETH and BTC? Are altcoins still benefiting from the light that shines upon Bitcoin or are they stepping out and becoming popular by themselves? Ultimately, can the two even be compared since they are seen to serve different purposes within the crypto and the wider finance space?
“Ethereum’s eventual dominance is hardly a sure thing,” commented Eswar Prasad, professor of economics at Cornell University and author of the soon-to-be-published book, “The Future of Money.” There could be technical complications with Ethereum’s switch to the PoS consensus protocol, “and there are many risks of attacks on DeFi products that could undermine confidence in those products and in Ethereum itself,” he told Cointelegraph.
Still, Bitcoin hasn’t proven itself as an effective medium of exchange, added Prasad, and its blockchain has only “limited functionality” compared with Ethereum, specifically when it comes to decentralized finance (DeFi): “Ethereum provides more flexibility, especially for DeFi products and services, and it has the potential to become a viable and efficient medium of exchange, featuring both low latency and high throughput for transactions.”
Maybe Green went a bit too far, suggested associate professor of finance at the University of Western Australia Lee Smales. “Inevitable” is a strong word, after all, he told Cointelegraph, “but, I’d say it’s highly likely that this will occur — although the recent rally in Bitcoin has outpaced that in Ethereum and has maybe delayed the timing a little bit. I would suspect it [flippening] happens in the next two to three years.”
Many seem to be betting on Ethereum and the question is often: not if but when? Ether could surpass Bitcoin as the crypto world’s top store of value in the coming years, said Goldman Sachs analysts in July, while deVere’s Green put the flippening “probably within five years.”
“I think it will be difficult for ETH to flip Bitcoin any time soon,” Justin Hartzman, CEO and co-founder of Canadian-based crypto exchange CoinSmart, told Cointelegraph. “The next [BTC] halving is in 2024, which will inevitably push the price up. Also, keep in mind that ‘Ethereum killers’ like Cardano and Tezos are coming up big time. If they work out, they could siphon out a lot of potential market cap from Ethereum’s kitty.” If the trading of places does occur, “I could see it potentially happening in five to six years.”
“I don’t believe in terms of market cap and overall valuation that Ethereum will surpass Bitcoin,” CEO of Banz Capital John Iadeluc told Cointelegraph, adding: “Bitcoin stands as the global ‘introduction’ to cryptocurrency, at least for the foreseeable future. For example, I don’t see any scenario where the SEC approves an Ethereum ETF prior to approving a Bitcoin ETF.”
Jason Peckham, an analyst at investment management firm Invictus Capital, told Cointelegraph: “I disagree that it’s inevitable. In fact, five years is enough time for an outsider to flip ETH and BTC both.” A lot hinges on how the two crypto communities manage their regulatory challenges, he added, as well as internal factors, like the pace “at which ETH has been burnt at post-EIP-1559,” which should make it less inflationary and potentially more attractive to investors. He added:
“If I had to pin it on one thing, I would say that ETH needs the supercycle/double bubble thesis to play out. That should allow for its various sectors to continue prospering in a way that won’t be possible in a bear market, which would likely be bearish for ETH relative to BTC as we have seen historically.”
Environmental factors must also be taken into account. Bitcoin mining’s prodigious use of electricity has been long known, but when Elon Musk drew wider attention to it earlier this year, BTC’s price plunged. While Bitcoin has rallied since then, “the energy [issue] continues to garner attention,” said Smales, and that should only intensify. “So, the Ethereum move to PoS creates an additional advantage that could result in the flip occurring sooner.”
Green recounted that ETH had already gained 300% in 2021, compared with only 55% for BTC, and it has outperformed all other assets during the first half of the year. Is there anything that could halt its momentum?
In order to stay in contention for flippening BTC, Ethereum needs to maintain its role as the biggest smart contract platform, however, some new competitors continue to emerge. “POS is not completely proven as of yet,” said Smales, and it could evolve so that the market is dominated by a few very large players — essentially centralizing it — creating market frictions and possibly even higher transaction fees.
The EIP-1559 upgrade was supposed to make Ethereum gas fees more manageable, but according to YCharts, the average gas fees have reached a three-month high. Given that the gas fees have placed a continuous strain on the usability of the network, the upgrade to Ethereum 2.0, or Eth2, cannot come soon enough.
Moreover, Bitcoin isn’t standing still, technologically speaking. “The planned Taproot upgrade could significantly enhance Bitcoin’s efficiency, privacy and the functionality of its blockchain,” said Prasad.
Bitcoin also enjoys the “first mover” advantage which can be critical with networks. “The case for BTC’s dominance boils down to its superior Lindy Effect,” Peckham told Cointelegraph, referring to a concept popularized by Nicholas Taleb which holds that the older a technology is, the longer will be its life expectancy. “Together with this is the long-term trend towards stronger-handed market participants holding the majority of Bitcoin while the rest of the world continues to be drawn into owning their stake in the headline cryptocurrency,” added Peckham.
Still, Ethereum seems to have momentum now. “The trends in the crypto markets have indeed been shifting towards Ethereum ever since the explosion of the DeFi summer, followed by the continuing popularity of NFTs,” said Zuckerman, as Peckham added:
“Cohorts of users were drawn into Ethereum for DeFi and for NFTs, while Bitcoin is less diverse in its range of uses by comparison. Most of what crypto natives like myself are excited about in crypto right now is either built on Ethereum or an Ethereum competitor.”
Ethereum has the richest ecosystem in the crypto space, and DeFi, which largely lives on Ethereum, today holds vast amounts in total value locked, despite the early summer downturn and assertions that DeFi was just a bubble with no inherent value.
“DeFi had its strictest test yet and passed with flying colors. The number of DeFi users has already passed 3.25 million as utility and use cases increase every day,” said Hartzman, adding: “With more applications and users coming in, Ethereum could leverage Metcalfe’s Law and exponentially increase its overall network value.”
Upon further reflection, though, does it even make sense to compare Bitcoin with Ethereum? One is a (putative) form of money, the other is a platform, a new supercomputer powering Web 3.0, upon which one can build new technologies, arguably.
Right now, the two platforms perform different tasks. Once the effects of the Taproot upgrade come to the forefront and developers start constructing a DeFi ecosystem around the Bitcoin network, then that could turn into a whole new argument. For right now, however, Bitcoin is primarily a store-of-value while Ethereum is a decentralized application platform. “This is not a ‘Coca-Cola vs Pepsi’ debate. This is a ‘gold vs internet’ debate,” said Hartzman.
“Both Ethereum and Bitcoin are cryptocurrencies, but vision-wise, they pursue two very different goals,” added Iadeluc: “I don’t believe Bitcoin and Ethereum are in competition with one another; rather, I believe their respective growth compliments one another.”
“From a technical standpoint, they are fundamentally different,” stated Peckham, but from an investor’s perspective, it does make some sense to compare them.
“Bitcoin is unique as a store-of-value,” said Hartzman. “There really is nothing quite like Bitcoin, and there won’t be anything like it any time soon. However, having said all that, it is impossible to bet against Ethereum due to its incredible network value, rich community and pace of innovation.”
Peckham told Cointelegraph: “As a trader right now, I’m more optimistic about Ethereum in terms of price action. I think it will continue to offer superior upside to Bitcoin in a bull run.”
Rather than picking a winner, though, “a more realistic prospect,” Prasad told Cointelegraph, is that “over the next few years, Bitcoin and Ethereum cement their joint dominance of the crypto space while the competition between their adherents leads to innovations in both ecosystems.”
Bitcoin (BTC) could still crash to $29,000 and lower, but price action is “healthier” than a week ago, the latest research concludes.
In a fresh market update on Friday, analysts at trading suite Decentrader said that BTC price action is finally showing “green shoots of optimism.”
After a difficult week in which BTC/USD dipped to just under $33,000, market analysis is now focusing on the likely outcomes of the rangebound behavior seen over the past few days.
For Decentrader, there is reason to be cautiously optimistic now where there was none a week ago.
“We believe that the current derivatives landscape shift and this extremely negative sentiment backdrop does increase the potential for at least a near-term relief bounce,” analysts summarized.
The reason lies in factors that had previously not fully “reset” as price action declined, notably the structure of derivatives markets. These include open interest declining toward less speculative levels, along with deepending negative funding rates.
As Cointelegraph explained, negative rates correspond to overall market sentiment calling for fresh losses — often perfect conditions for an upward price shift.
“We are now also beginning to see meaningful buyers step in, which is driving a potential change in the higher time frame trend from bearish to bullish,” the market update added about the additional positive pressure on the available BTC supply.
Selling overall, while uncharacteristic of bull markets, hints that those behind it are taking losses.
Going forward, the outlook for support is a bounce zone at $29,650, something tha would itself only come into play should several other areas above $30,000 fail to hold.
To the upside, meanwhile, resistance lies between $38,850 and $39,700, Decentrader said, followed by a significant “empty” patch to $47,900 and then $53,400.
“Support remains for now at $32,700 though there is some argument to suggest that price reached that level with Monday’s wick falling just $300 short of it,” the update reads.
“Beyond that level, the next support is just shy of $30k, at $29,650 leaving the door open for a potential sub-$30K liquidity grab.”
Sentiment, in line with funding, continues to stay in “extreme fear,” as per the Crypto Fear & Greed Index, this now rivaling the 2018 bear market trough and the March 2020 coronavirus crash in terms of record-breaking length.
Flushing Financial Corporation, the parent company behind New York-based Flushing Bank has partnered with crypto firm New York Digital Investment Group (NYDIG) to offer Bitcoin (BTC) services to its customers.
The bank was founded in 1929 and according to its Q4 report it held more than $8 billion worth of assets at the end of 2021, with a net income of around $200 million.
According to an announcement, the partnership with NYDIG will enable the bank to offer its customers BTC buying, selling and holding services in a “safe and secure environment.”
Flushing Bank stated that it aims to launch its BTC-related services later this quarter and will divulge further details of its roadmap soon.
Flushing Financial Corporation CEO and president John R. Buran attributed the firm’s BTC adoption play to its desire to keep up with growing trends in financial markets:
“As part of our ongoing digital transformation, we recognize the importance of staying current with emerging market trends and consumer demand for alternate financial services.”
On the banking front and credit union front, NYDIG states that it has more than 35 partnerships in the sector, including deals with Five Star Bank, Idaho Central Credit Union, STAR Bank, U.S. Bank and NYMBUS to name a few.
NYDIG Chief Innovation Officer Patrick Sells stated on Jan. 25 that the firm is paying significant attention to partnering with traditional financial institutions as it’s “ready to show the world that banking is better with Bitcoin.”
Sells highlighted a growing demand for crypto exposure via organizations that users are already familiar with:
“Our research is clear; consumers want Bitcoin and they want it through the banks and credit unions they already trust.”
The firm has also been steadily growing its mainstream presence via partnerships with top sporting organizations such as the NBA’s Houston Rockets, along with Luxury Automobile Dealer Post Oak Motor Cars.
Bitcoin (BTC) price continues to flash mixed signals, raising uncertainty among investors and negatively impacting asset prices across the market.
Data from Cointelegraph Markets Pro and TradingView shows BTC price pinned below $36,000 and even though crypto and equities markets underwent a brief relief rally on Wednesday, comments from the recent FOMC meeting appear to be settling in as investors internalize the fact that interest rate hikes are on the way.
Here’s a look at what analysts and traders are saying about Bitcoin’s most recent price action and the macroeconomic factors impacting the wider crypto market.
The long-term range-bound trading that BTC has been in since early 2021 was addressed by Mike McGlone, Senior Commodity Strategist for Bloomberg Intelligence, who posted the following chart and asked, “What ends Bitcoin, Ethereum range trade?
According to McGlone, the key to escaping the current range are the “bullish fundamentals” that back the underlying strength of Bitcoin.
“By the rules of economics, a market with rising demand and declining supply will go up over time, suggesting that Bitcoin may be forming a bottom again around $30,000 as $60,000 resistance ages.”
A deeper analysis on the impact of Wednesday’s Federal Reserve meeting was provided by Bilal Hafeez, CEO and head of research at Macro Hive, who noted that the tone of the meeting “turned out to be more hawkish than expected.”
Hafeez pointed to the decision by the Fed to raise the inflation forecast as a sign that the central bank has realized that “they need to be more hawkish than before,” and he highlighted Powell’s comments that “this cycle would be different to the last cycle, which suggests faster hikes than before.”
With that being said, Hafeez indicated that the Fed “has not decided on a path yet,” and noted that Powell “didn’t give much additional information on quantitative tightening except that it would operate in the background.”
“Overall, the Fed is comfortable with equity and risk markets selling off as it tightens financial conditions and so could reduce inflation. Bond yields have risen after the meetings, equity and crypto markets have given back gains. The Fed continues to add downside risks to risky markets.”
The near-term outlook for BTC was briefly touched upon by derivatives traders and pseudonymous Twitter user ‘Crypto McKenna’, who posted the following chart and stated that “BTC price action is about to get very boring.”
“No trade season for the next 10-20 days in my opinion.”
Despite this projection for near-term weakness and sideways price action, the long-term outlook continues to brighten for multiple reasons, as noted in the following Tweet from crypto analyst Will Clemente.
Bitcoin price weakness because of risk-off behavior while fundamentals strengthening: Intel creating mining chips, Russia looking to get involved in mining, Goldman Sachs bullish, Google partnership w/ Coinbase, El Salvador Bond.
Hard to think asymmetry is to the downside.
— Will Clemente (@WClementeIII) January 27, 2022
The overall cryptocurrency market cap now stands at $1.663 trillion and Bitcoin’s dominance rate is 41.5%.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
About Google Data Analytics Professional Certification | Includes my opinion
22 Rising NFT Artists to Watch in 2022
BTC, ETH, BNB, SOL, ADA, XRP, LUNA, DOT, AVAX, DOGE
LG Display’s latest transparent ‘shelf’ OLED can display or augment artworks
Top 10 Crypto Metaverse Coins With a Circulating Supply of Over 1 Billion – The VR Soldier
The gadgets we broke – The Verge
Is the “uncanny valley” good for a future metaverse?
The biggest crypto, NFT, digital real estate and metaverse stories of 2021