(Bloomberg) – Ether’s relative resilience in May’s crypto crash once again highlights the idea that the second-largest digital token could one day surpass bitcoin in market value.
Right now, the largest virtual currency is more than double ether, but the gap narrowed by roughly $ 350 billion in May, courtesy of one of Bitcoin’s worst declines and a smaller ether retracement. Followers of ether cite its popularity for blockchain-based financial services and digital collectibles, as well as a continuous upgrade to increase the efficiency of the affiliated Ethereum network.
Ether “will probably overtake bitcoin at some point in the future as Ethereum will outperform when it comes to innovation and developer interest,” said Tegan Kline, co-founder of blockchain software company Edge & Node. . But he also said that investors should allocate capital to both tokens.
The speed of change in the crypto sector makes the forecast dangerous. Still, strategists at Goldman Sachs Group Inc. and star investor Cathie Wood are among those who highlighted the potential of ether recently. More broadly, interest in virtual currencies has expanded beyond bitcoin, whose $ 1.6 trillion share of the total value of the crypto market has dropped to 42% from about 70% in 2021, according to data from CoinGecko.
In a report last week, Mikhail Sprogis and Jeff Currie, commodity strategists at Goldman, wrote that bitcoin appears “fragile,” adding that there is a high probability that it will “eventually lose its crown of dominant digital value to another cryptocurrency. with greater practical use and technological agility ”.
They said that ether seems the most likely candidate to outperform bitcoin, although they added that such a “result is far from certain.” Annual growth in ether’s supply is limited, they said, helping its credentials as a store of value.
Read more
Pat LaVecchia, CEO of cryptocurrency broker Oasis Pro Markets LLC, argues that ether is being perceived to have “a better growth history” in the long term.
For some, bitcoin will defend itself against its rivals to maintain its position, not least because of the sheer amount of attention it receives. For example, Andrew Kiguel, CEO of Tokens.com, argues that bitcoin has “the best external validation signals,” given that institutions and moguls like Musk keep talking about cryptocurrency.
Ether rose more than 900% over the past year, outpacing bitcoin’s 275% rise. In the face of huge profits, the debate over what crypto experts call “flippening” – a future in which the value of ether exceeds bitcoin – is likely to stay alive for a while.
Original Note: Crypto Shakeout Stirs Debate on Ether’s Shot at Usurping Bitcoin
More stories like this are available on bloomberg.com
Subscribe now to stay ahead with the most trusted business news source.
© 2021 Bloomberg LP
