Bitcoin is the king of crypto, but Ethereum’s rise to the top of crypto seems unstoppable, analyst says

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Bitcoin, the world’s No.1 crypto and the genesis of the current digital asset revolution could one day bow to a new king of the industry, a researcher speculates.

Ethereum will continue to outperform Bitcoin in 2021 and eventually outperform its rivals, wrote Nigel Green, chief executive and founder of deVere Group, a large financial advisory and asset manager, in a note Wednesday.

Green argues that bitcoin BTCUSD, + 0.70%, which was launched in a white paper in 2008, could cede its dominance to Ethereums Ether ETHUSD, -0.58%, which is seen by some as offering a case of use clearer than bitcoin which is considered by some to be digital gold.

The value of Bitcoins in 2021 increased by 57%, while that of Ethers increased by 318%, when last checked on CoinDesk.

In comparison, traditional assets have seen much more mundane returns. S&P 500 SPX Index has gained over 18% year-to-date, Dow Jones Industrial Average DJIA is up 15% so far in 2021, Nasdaq Composite Index COMP has risen nearly 14 % and orGC00 futures are down almost 6%, FactSet data is showing.

Bitcoin’s main marketing argument has been its claim by enthusiasts to be a store of value and as a currency to a lesser extent, but the Ethereums network is seen by many as a powerful, open source, and decentralized backbone from from which a number of applications can be based.

Ether, launched in 2015 by a team including Vitarik Buterin, Charles Hoskinson and Gavin Wood, allows software developers to write custom programs on its network. Sometimes these apps are called smart contracts.

The Ether Bulls argue that the world’s # 2 crypto by market cap is the most in-demand development platform, thus underscoring the value of Ethereum networks not only as a platform for developers, but as a platform for development. global financial utility, Green wrote.

Ethereum also serves as the backbone for a number of popular and revolutionary platforms, including Decentralized Financial Networks, or DeFi, Non-Fungible Tokens, or NFTs, and DAOs, or Decentralized Autonomous Organizations.

These increasing uses have erased the work of ethers, but that should change in the coming months.

A key upgrade to the Ether network, which includes a gradual shift from a proof of work protocol to proof of stake and increased storage capacity and processing power for smart contracts, is underway.

Put simply, a proof of work network requires huge amounts of computing power to verify the distributed ledger network, which is the foundation of traditional cryptography, while a proof of stake requires proof of ownership and is considered more environmentally friendly as it reduces the carbon footprint of verifying blockchain transactions and paying rewards to miners who support the network.

The process of investors staking their Ether to upgrade to Ethereum has also been credited with rising prices for the digital asset.

These upgrades represent a major boost not only for Ethereum but for blockchain technology itself, Green writes. Ultimately, that will mean that its value will surpass that of Bitcoin probably within five years, he predicts.

Green is not the first to speculate that Ether will one day supplant Ether. Industry enthusiasts even have a name for it: flippening. Flippening is the day when Ethereum surpasses bitcoin in market value.

Yet bitcoin remains the dominant player, accounting for 44% of the crypto market’s value of nearly $ 1.96 trillion versus nearly 19% of Ethers, according to CoinMarketCap.com.

CoinMarketCap.com

Certainly, it is impossible to know which crypto, if any, will survive let alone become the most dominant. Industry scrutiny is intensifying as regulators seek to put in place safeguards to protect potential investors and central banks consider the use of digital currencies and central bank coins, which could also pose an existential threat to the existing range of crypto assets.

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