Is Bitcoin’s “incredible network value, rich community, and rate of innovation” enough to fend off Ethereum?
In mid-August, Nigel Green, CEO of deVere Group, remarked that it seemed as though “Ethereum’s ascension to the top of the cryptoverse appears unstoppable.” It’s easy to see why Green makes this assertion. In contrast to BTC, ETH is more scalable, possesses numerous uses including smart contracts, and its network is full of NFTs while more tokens are being generated every day. To make it even more eco-friendly, Ethereum will shift to a proof-of-stake (PoS) consensus mechanism, following Bitcoin’s lead in dropping PoW in favour of an energy-efficient PoS.
During an earlier interview, in February, Mr. Green remarked that “Ethereum is already years ahead of Bitcoin in everything but price and fame,” adding: “There’s a real sense that 2021 is the year for Ether. Now is the moment for it. While it’s certain that the world’s first, largest, and best-known cryptocurrency will lose its market-cap crown, is it also foregone that it will abandon it? No, I’m afraid not.
Molly Jane Zuckerman, content lead at CoinMarketCap, told Cointelegraph that: “Looking at CoinMarketCap’s homepage for the last five years, it is typically Ethereum that is sitting in second position, just behind Bitcoin — and that it has stayed in that number two spot since its launch.”
Now, may we hope for a “flippening”? This expression refers to a reversal in which ETH rises to replace BTC as the number two cryptocurrency. Will altcoins continue to benefit from the extra attention paid to Bitcoin, or will they stand on their own and gain popularity? To sum up, can the two of them be compared? They’re applied in very different places, after all.
An agreement has not been finalised yet
Eswar Prasad, professor of economics at Cornell University and author of the soon-to-be-published book, “The Future of Money,” noted that “Ethereum’s eventual supremacy is hardly a sure thing.” With regard to Ethereum’s migration to the Proof of Stake (PoS) consensus algorithm, the source informed Cointelegraph, “There could be a lot of technical difficulties as well as several security threats that could erode the trust in DeFi products, and faith in Ethereum itself.
Still, the Bitcoin blockchain has very “limited capability” when it comes to decentralised finance (DeFi), says Prasad. More flexibility is provided by Ethereum, especially for DeFi products and services, and it has the potential to become a functional and efficient means of trade.
As associate professor of finance at the University of Western Australia, Lee Smales believes that Green may have overstepped a bit. Inevitable has a stronger connotation, but the gain in Bitcoin has greatly outperformed the one in Ethereum, which could postpone things just a bit. If I had to make an educated guess, I’d say that [flipping] will happen in the next two to three years.
And how long will it take?
A large number of people are putting their money on Ethereum, which raises the question: Not if, but when? Goldman Sachs researchers predicted in July that ether (ETH) might overtake bitcoin (BTC) as the world’s leading cryptocurrency store of value, while deVere Digital Green foresees the flippening “in the next five years.”
Justin Hartzman, CEO and co-founder of Canada-based crypto exchange CoinSmart, told Cointelegraph that “I believe it will be tough for ETH to overtake Bitcoin anytime soon.” To be expected, the next halving is expected to be in 2024, which will certainly drive the price up. Also, it is essential to remember that new competitors like Cardano and Tezos are making waves in the industry. In the event that they work out, they might draw significant value from Ethereum’s purse. I could see it maybe taking place over the next five to six years.
Despite having a market cap that’s 12 times that of bitcoin, Ethereum CEO John Iadeluc told Cointelegraph that he doesn’t believe Ethereum will ever exceed Bitcoin, stating, “At least for the foreseeable future, Bitcoin is the world’s introduction to cryptocurrency.” When asked about the probability of the SEC allowing an Ethereum ETF prior to authorising a Bitcoin ETF, the answer is simply that I can’t think of any.
I disagree that it’s inevitable, according to Invictus Capital analyst Jason Peckham. In reality, a period of five years is sufficient time for an outsider to successfully flip both ETH and BTC.