18 Mar 2021 Simon Briggs
Top Analysts Believe Ethereum Could Dethrone Bitcoin
Bitcoin, the world’s most-influential cryptocurrency to date, may end up chasing the altcoin leader – Ethereum, as per speculations from Ryan Watkins, senior research analyst at Messary. The analyst, however, made his predictions without a pinpoint release date for the much-anticipated Ethereum protocol upgrade.
Watkins also noted that despite there is no clear deadline for ETH 2.0 implementation, Ethereum could overtake Bitcoin as the leading crypto asset mainly due to the official ETH 2.0 introduction.
“The selling point of Bitcoin over Ethereum as a store of value asset boils down its monetary policy being very predictable and the Bitcoin blockchain being very secure. I think that with the shift to Eth2 and proof-of-stake, Ethereum may potentially be more secure than Bitcoin,” Watkins claimed, adding that the ETH 2.0 overhaul, combined with the forthcoming ETH burning mechanism may make ETH token burning happen at a faster rate than the rate of ETH creation. Thus, an increase in price could be anticipated.
“Ethereum’s monetary policy will actually change in Eth2 so it would actually be deflationary. So then, every year, there would be less and less Ether in existence because it’s being burnt,” Watkins noted.
However, Watkins’ claims are backed by several indicators, including Blockchain Center’s “Flipping index”, which measures Ethereum’s strength in relation to Bitcoin. Interestingly, Ethereum sits at 65.6%, when compared to Bitcoin, which is a retreat from the early February all-time high of 72.3%. The index, using eight crypto metrics, suggests that Ethereum is currently above Bitcoin by nodes count, total transaction fees, and transaction count. The crypto metrics also include market capitalization, active wallet addresses, transaction volume, trading volume, and data from Google searches.
Meanwhile, Watkins emphasized that the use of Ethereum’s blockchain is continuing by the rapidly emerging DeFi ecosystem, which, in turn, could attract new users faster than Bitcoin.
“At a certain point, the economy of Ethereum begins to attract so much capital, both human capital and financial capital, that it is actually a force in the global economy,” Watkins stated, adding that “The GDP of Ethereum is actually rivaling many large countries.”
Earlier in March Ethereum’s co-founder, Vitalik Buterin, opposed Ethereum miners, stating that Ethereum burning may happen sooner than expected, with the introduction of EIP-1559, which would redirect some of the transaction fees to a “burning” smart contract, rather to miners.
А major difference between Bitcoin and Ethereum is that the altcoin leader does not have a fixed supply. Bitcoin, on the other hand, is capped at 21 million coins. Arguably, because of the limited number of BTC coins and the significantly lower market cap, the price per Bitcoin is drastically higher than the price per ETH. A scarcity effect is created, which analysts use to explain the higher BTC price when compared to Ethereum.