Will Ethereum Overtake Bitcoin?

Since the beginning of this year, cryptocurrencies have been experiencing a never-ending hype. Supporters of Bitcoin & Co. hope not only for financial freedom, but also for a fairer financial world. And they are busy buying Ethereum. Rightly so?

The first cryptocurrency launched in 2009: Bitcoin. It is also the most successful digital currency. There are thousands of cryptocurrencies today, – but apart from Bitcoin, only a dozen have future potential: Ethereum, Binance, Solana or Cardano.

 

Ethereum has more potential than Bitcoin

As he recently emphasized in a CNBC interview, Mike Novogratz, a former hedge fund manager and CEO of Galaxy Digital, believes that Ethereum is currently a more attractive investment opportunity than Bitcoin. Ethereum will outperform Bitcoin because Ethereum focuses on technology and the main purpose of Bitcoin is to hedge against inflation. Due to the Fed's aggressive stance and its plan to combat inflation, Ethereum has better prospects.

Novogratz assumes that Bitcoin will become increasingly unattractive due to the lack of further use cases. In the case of Ethereum, on the other hand, supporters see the potential of solutions implemented by the underlying technology. Such are at least the thoughts surrounding the Ethereum price and the current bull market, which Market Insider does not yet consider to be over. The Ethereum blockchain supports smart contracts and is one of the most widely used blockchains, which also enables the creation of dApps. The Ethereum blockchain has developed into one of the largest networks for building decentralized finance (DeFi) and non-fungible tokens (NFTs). "That's why Ethereum is more developed than Bitcoin. People see Ethereum as a technology bet and Bitcoin as a devaluation of legal tender," Novogratz told CNBC.

However, Market Insider also points out that Bitcoin is still the dominant virtual currency, although one should not underestimate that its market share has dropped from 70% to 40%. Currently, the Bitcoin price moves around 49,000 – 50,000 US dollars per coin, which corresponds to a total market capitalization of just under 920 billion US dollars. An Ethereum coin, on the other hand, costs just under 4,000 US dollars and currently has a market capitalization of approximately 477 billion US dollars.

Nevertheless, Novogratz estimates that Ethereum could pose a threat to Bitcoin, especially in terms of market value. He told CNBC that, although he believed the price of Bitcoin would not fall below 40,000 USD, he sees higher prices for Ethereum.

Compared to Bitcoin, Ethereum transactions are still bullish, and Ethereum's price recovery overwhelms its biggest competitor. In fact, since December of last year, the price of Ethereum has risen by about 650%, while the price of Bitcoin has risen by about 200% over the same period. Either way, investors can now look forward to a "monster quarter," as the former hedge fund manager further explained to CNBC, "[...] because we have high inflation and rapid growth." In the long term, Novogratz remains optimistic about Ethereum, Bitcoin, and the entire crypto market. He also points to the new interest from institutional investors: "New players are lining up to participate in the crypto economy."

So things remain exciting for cryptocurrencies and we can only wait and see what the new year brings.

What are your experiences and expectations with cryptocurrencies like Bitcoin or Ethereum? Feel free to leave a comment.

Comments 0