Bitcoin could lose its crown to Ethereum by 2022, even after a sudden increase of $ 70,000

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The price of Bitcoin suddenly skyrocketed this week, hitting a new all-time high of around $ 68,000 per bitcoin, following predictions of a “big week”.

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The rise in bitcoin prices comes after Ethereum, the second largest cryptocurrency, hit all-time highs last week. The price of ethereum has risen 35% over the past month, compared to a 25% increase in bitcoin.

Now, as traders and investors applaud the combined crypto market surpassing $ 3 trillion for the first time, a hedge fund manager has predicted that Ethereum may overtake bitcoin as the most common cryptocurrency. precious from 2022.

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“I really think there is a very good chance that ether will surpass bitcoin. I wouldn’t be surprised if that happened during the cycle,” Rahul Rai, co-head of neutrality told Insider. market at BlockTower Capital. “Very difficult to predict when this cycle will end. My take is in the middle of next year.”

Ethereum’s price has surged over the past year amid renewed interest in decentralized blockchain-based finance (DeFi) and non-fungible tokens (NFT) – both of which rely heavily on the Ethereum network.

Many in the crypto community have already predicted that Ethereum could eventually overtake bitcoin as the most valuable cryptocurrency, with DeFi – the idea that traditional financial services could be replaced by blockchain-based protocols – and NFTs – using crypto technology to symbolize all kinds of digital media. and assets – helping to drive the adoption of Ethereum and, in turn, the price of its Ether tokens.

“Ethereum is trying to fuel the rails of all global finance going forward, and it’s a much bigger market, if it is successful,” Rai said. “If this is successful, and if the thesis comes to fruition, then the market value will capture billions of dollars in global activity, and it’s a much bigger market than (where) bitcoin is going up (to).”

Rai is still bullish on the price of bitcoin, however, echoing others who have said bitcoin could replace gold as the world’s de facto store of value and hedge against inflation.

“Bitcoin is a store of value, it’s digital gold,” Rai said. “And so its market cap, at most, will be somewhere around gold, maybe bigger, because it has better properties than gold. But that’s about the benchmark you’re going to use. to cap its market size. “

Gold’s market cap is currently estimated at around $ 11.6 trillion, with bitcoin at $ 1.3 trillion and ethereum at just $ 570 billion.

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In addition to the surge in demand for ethereum in recent months, the supply of ether tokens has also come under pressure. A long-awaited Ethereum upgrade, rolled out over the summer, has meant that many Ether tokens are “burned” instead of entering the market, but data shows investors are also looking to keep them longer.

“The demand for ethereum has increased as the creation of new coins has slowed,” said David Russell, vice president of market intelligence at TradeStation Group, in emailed comments, highlighting the data. of Cryptoquant which show that only 18 million Ethereum are now available. to the public because big investors have taken ethereum off the stock exchanges in order to keep them safe. “That’s the least in over a year, and a drop of around 16% since the end of June.”

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