Ethereum and Bitcoin have been battling it out for the number one crypto in the market cap. Now, with new surges in the price of Ethereum, many crypto enthusiasts are questioning the possibility of Ethereum overtaking Bitcoin to reach the number one spot. If happening, this would be a monumental turning point in the cryptocurrency industry.
The first key factor is market cap metrics:
Following Blockchaincenter data, the market caps of Ethereum and Bitcoin are currently at a 51.9% ratio. They will reach the same rank when this ratio is 100%. And whilst considering further upwards price action from Bitcoin, Ethereum has to be double in market valuation so that balancing with Bitcoin.
Currently, Ethereum has surpassed Bitcoin in two metrics – on-chain transactions and transaction fees generated, which are very important metrics to show the widespread use of digital assets within the cryptocurrency industry. This crypto is also on its way to reach other metrics too, including active addresses on each blockchain and the aggregated trading volume on exchanges.
Other key factors are adoption and use-cases:
Because of its scarcity, first-mover advantage, brand recognition, and label as ‘store-of-value, Bitcoin has remained on the number one rank of market cap.
However, 2021 showed that cryptocurrencies have applications far beyond Bitcoin, and that trend will continue in 2022. As interest and adoption in areas like NFTs, DeFi, and the metaverse continue to grow, Ethereum will benefit as well, making it a good bet that it will outperform Bitcoin in 2022.
Ethereum isn’t as widely accepted by real-world businesses as Bitcoin, but it’s the leader in the space where cryptocurrencies are gaining hold – in the metaverse, with NFTs, and with other real-world applications. Ethereum has become the medium for buying and selling NFTs by allowing smart contracts, while Bitcoin’s does not. Beyond non-fungible tokens, that function has been utilized in real estate transactions, for concert tickets, and other such purchases where the item in question needs to be authenticated.
Ethereum’s approach shows the future of cryptocurrency isn’t about displacing the dollar, but serving needs that fiat currency can’t meet on its own.
In the past, price action in both assets has been influenced by the announcement of partnerships, investments, and ‘mainstream’ adoption of the asset through payments or similar. But now, many experts pointed out that the key decider in ‘The Flippening’ could be the amount of adoption each asset gets from outside markets. Which one attracts more investors will lead the race.
DISCLAIMER: The point of view in this article is just prediction, not financial advice!
(Reference: Coin rivet)