I believe Ethereum is set to outrun other major cryptocurrencies in the coming months. Ethereum continues to be the most valuable Blockchain, and the upcoming updates will cement its position in the world of decentralized finance and technology. Ethereum plays a very different role to Bitcoin (BTC-USD), and while I think both are worth owning, Ethereum offers a Shiba Inu type return , though perhaps also, lower risk than Shiba (DO NOT BUY SHIBA as an investment please).
It’s A Bull Market, Especially For Ethereum
Bull run is upon us and any crypto investor can feel it in the air. Bitcoin has seen the cryptocurrency make a new all-time high, but since retrace to near $60,000. Ether, on the other hand, hasn’t quite broken through the ATH it made back in May when it reached $4,178. With that said, I believe there are a few factors that lead me to believe that Ether will outperform Bitcoin in the next few months, and even more so long term, to the point that one day Ether’s market cap will surpass that of Bitcoin.
Eth Vs Bitcoin..
For starters, we are already seeing more strength in Ethereum than Bitcoin, with the former holding a lot better during the pullback of the last week. On top of that, in the past Ethereum has amplified returns versus Bitcoin during bull markets. But the reason why I speculate Ethereum will outperform Btc, lies in its fundamentals.
Now, you should definitely own Btc. Both Bitcoin and Ether play different but necessary roles, in the cryptocurrency ecosystem. While Bitcoin provides a stable source of value, Ether is the foundation of DeFi and NFTs. Ether is moving to Proof-of-Stake, while Bitcoin is remaining a Proof-of-Work blockchain just accentuates this complementary relationship. Massive hurdle for Bitcoin will be the new attention to ESG and its effects on the planet. Larry Fink has changed the investing landscape by putting out “THE FINK LETTER” which stresses all his portfolio of companies to act in accordance to ESG. Of course, Elon musk caved in and issued a statement against accepting Bitcoin for payments. When Larry Fink says something, everyone on wall street listen.
Having said this, the possibilities for growth and utility for Ether seem to be much larger than for Bitcoin. Simply, Bitcoin is gold, which I find to be an accurate analogy. This means that ultimately, Bitcoin’s utility is limited to acting as a store of value. Gold has a market cap of over $11 Trillion, which we could use as a preliminary target for Bitcoin, which currently sits at over $1 Trillion.
Ethereum utilities
Ethereum, on the other hand, has many more potential utilities. Just taking DeFi, for instance, we are witnessing something that could potentially replace banking and finance forever. According to Statista, the global banking market is worth over $7 trillion. But this is just the start, we have many other industries that Ethereum could host, including gaming, art (NFTs), and digital identity solutions which could solve voter fraud to identity theft.
Bitcoin’s supply is capped at 21 million, with around 18 million already in circulation. Meanwhile, there are 118 million Ethereum in circulation, with this number increasing by a maximum of 18 million every year. Bitcoin Wins in the long term I believe with their deflationary utility of 21 million Bitcoins.
Possible Price Outlooks
Lets look forward about 3 years, what can we expect? Bitcoin could take the place of gold by then, which has a market cap of $11 Trillion, with around 19.5 million Bitcoin in circulation. This would mean each Bitcoin could be worth close to $550,000, that would equal to around a 9-fold increase from today’s price.
And now for Ether, this is a hard question to answer, but we can also get a estimation of where Ethereum is going by using a few metrics of its current demand (not to mention what other innovations that can be coming, NFTs came out of nowhere). Ethereum’s market cap stands at half a Trillion (Nov2021),giving it plenty of room to grow if we consider all the business that could move into Ethereum’s ecosystem. If by 2024 Ethereum captures half the market cap of the financial management segment and the IT Industry, we’d also be looking at a capitalization of $11 Trillion. By 2024, there would be close to 200 million Ethereum in circulation, with each worth around $50,000. This represents roughly a 12.5x increase from today’s price.
Of course, I am being very optimistic here, both for Bitcoin and Ethereum, but it serves to prove the point that Ethereum has the potential to deliver superior returns to Bitcoin. The utility for Ethereum is much bigger, and we are still in the early stages of adoption.
Bitcoin Only Transfers Money Between Parties
It comes down to to this basic fact about this war of blockchains, Eth advantage over Bitcoin is that it allows individuals and companies to do much more than just transfer money between entities. There is so much innovation on the Ethereum chain that every investor is throwing money everywhere but Bitcoin. From the simple fact of talent, Eth utility over Bitcoin is just too great to over look. The most skilled developers in the world are picking Ethereum over bitcoin and this should worry the Bitcoin community in the short term. Short term is the key word here, many have gone against Bitcoin and written it off, especially during bull markets. However, the value always ends up in Bitcoin during every crypto winter we’ve had.
This Happened Twice Before. The Halvening
Q4 of the year after the halving event is the most exciting part of the four-year cycle. Bitcoin broke its previous all-time high in October during the 2013, 2017, and 2021 bull runs. Similar to the current cycle, 2013 witnessed a large summer consolidation. Bitcoin posted the largest gain in it’s short history in November 2013 of 400% gain. The likely hood that Bitcoin will post a 400% return next month is quite low since its market cap has 10x from 2013. However, historically speaking, an October all-time high after a summer consolidation in Q4 post-halving has a recipe for massive gains.
We Are One Tribe
No one can tell you with absolute certainty which cryptocurrency will have the best returns but all we can do is understand history and place our chips in the correct positions. May it be Eth or Btc, please remember that we are #teamcrypto, we need to end the tribal warfare and support each other to make the legacy financial system something of the past. Short term, my money is on Eth as it seems to be the better short term play, however, Bitcoin is my pick for long term growth (7–10 year outlook).
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