Numbers Don’t Lie, 6 Reasons Why Ethereum Will Overtake Bitcoin
Yes, there is no denying that Bitcoin has been defying gravity. The coin’s performance has been stellar. It is comparable to the exponential speed of rockets in outer space.
For so long, prices flirted with $20k, and it was only a matter of when buyers will break above this ceiling.
When all hell broke loose, not only was $20k broken, but bulls pressed on their accelerants, surging to over $23k.
Next pump, FOMO?
ETH at $1,000 will be a Primer for $10k?
Assuming you missed the train—or want to hop on to the next rocket, are there other potent alternatives?
Analysts believe so.
According to Lark Davis, Ethereum is a “ticking time bomb.”
#ethereum is a ticking time bomb, $1000 could come a lot quicker than most expect
— Lark Davis (@TheCryptoLark) December 16, 2020
For Qiao Wang, Ethereum is Bitcoin’s silver, not Litecoin.
If you are new to crypto, bought BTC, and are wondering which cryptoasset is silver to BTC’s gold.
It’s not LTC. It’s ETH.
— Qiao Wang (is going to Denver) (@QwQiao) December 17, 2020
Meanwhile, Crypto Dog wants ETH to reach $1k in December.
All I want for Christmas is $1000 $ETH
— The Crypto Dog📈 (@TheCryptoDog) December 16, 2020
Increasingly, analysts are in synchrony with their projections. One of them, Anthony Sassano, for instance, thinks the ETH/USD price will rise to $10k in the next few years.
Last chance to buy $ETH before $10k
— sassal.eth 🦇🔊🐼 (@sassal0x) December 16, 2020
On the other hand, David Gokhshtein says altcoins will rally if the ETH price rally above $700.
I’m watching $LTC and $ETH right now.
If $ETH hits over $700 – get ready for the biggest #altcoin run in the history of this space!
— David Gokhshtein (@davidgokhshtein) December 16, 2020
The Writing is on the Wall, Slowly but Surely
It appears the writing is on the wall.
With no bluffs, the “imminent” rally would be one of the biggest and explosive. There are pointers, developments of the last few years have been the anchors for buyers waiting for a moonshot.
There is no denying that crypto as a whole has matured.
In 2017, the rise of ICO and the exponential rise of crypto prices was at the back of mass hysteria. Retail investors were exposed to projects, investing without paperwork.
There were simply no impediments. As in the nature of decentralized projects, scammers took advantage and broke some of them. Law enforcement got involved, the age of ICO came to an end, but that didn’t mean the end of Ethereum.
Admittedly, prices tanked to sub-100 in 2018.
The resilience of the network has been evident in the last few years.
How Ether prices perform – aside from external factors like support from PayPal or institutional props, can be gleaned from on-chain developments.
According to Sassano, the Ethereum development has been drastic and the network maturing important metrics registering impressive growth over the last few years.
The crypto influencer posted a very interesting tweet, a table of Ethereum metrics, comparing on-chain data between Nov 2017 and Dec 2020, and reasons why ETH flipping BTC is highly likely:
These are More Reasons Why Ethereum Will Flip Bitcoin to be the Most Valuable:
The mark of any public chain is utility. Full stop.
Usage. Community. Source code improvement.
Without a community, the network fades as there will be no utility. Also, without experts willing to contribute pro-bono, the platform will be susceptible to exploits.
Such on-chain exploits can be disastrous. It is even more catastrophic in Proof-of-Work networks like Ethereum that rely on a community of miners to secure the network.
Ethereum is now transacting more than Bitcoin, and Messari projects Ethereum to settle over $1 trillion in 2020 alone.
2. Hash Rate
If network security is a metric for gauging the resilience and confidence from the investment community, Ethereum is at a position where everyone can say “is ready” for a moonshot.
Hash rate is simply the amount of computational power channeled by miners in exchange for transaction fees and block rewards.
In three years, the Ethereum hash rate has more than doubled, rising 150 percent from 109 TH/s to 272 TH/s.
Hash rate follows price. However, in the last two years, the network hash rate has been rising even though prices had fallen by over 90 percent after peaking at $1.4k. At the depth of the 2018 crypto winter, each ETH was trading at $70k.
3. The explosion of Unique and Active Addresses
Reflective of activity is the uptick of unique addresses. By Nov 2017, there were 12.5 million unique ETH addresses. This has risen by over 10X to 128 million as of Dec 2020; and will continue to rally as long as Ethereum is a dominant smart contracting platform.
Out of this, 400k is active addresses—more than 2X that of Nov 2017. It can mean the majority of ETH holders want to hold on to their assets through DeFi lending platforms or innovative products like yETH vaults.
4. Miners Earning More from Gas Fees Because of DeFi
As observed, the rise of unique and active addresses is at the back of rising Gas fees (as expected). On average, ETH miners share a whopping $2.6 million on top of block rewards dispensed every minute.
The sharp spike in Gas fees also saw the Ethereum network fully utilized. As of today, all ETH blocks are full. The utilization rate is above 97 percent. Two years ago—even at the height of the ICO- mania of late 2017, Ethereum’s utilization capacity stood at 70 percent.
The surge in Gas fees and increase in network utilization is due to DeFi. DeFi protocols want to replicate traditional financial instruments while eliminating the middle man for trustless operations.
According to trackers, over $14.5 billion worth of assets is under management.
5. Rise and Rise of Stablecoins and Valuation
At the heart of DeFi is stablecoins. These are digital currencies that are issued by entities—not central banks, that track the performance of the USD—and other fiat currencies. Ethereum is the home of DeFi and stablecoins. The most popular of them all is USDT. While it may exist on other smart contracting platforms like Tron, Algorand, and Omni, USDT is active in Ethereum.
Over the years, it has been common to see huge chunks of USDT move from other platforms, like Tron, for instance, to Ethereum.
It highlights the level of demand generated from its dApps for purposes as DeFi like in trading via Uniswap or other complex financial products. As of today (Dec 17), the USDT market cap stands at $19.9 billion, becoming the fourth largest coin by market cap.
Interestingly, minting of stablecoins is on-demand, meaning for every coin in circulation, there is an equal amount of USD—and other assets backing the asset and maintaining its fiat peg.
There are other coins as USDC, DAI—decentralized and algorithmically controlled by the Maker DAO, and more. With Ethereum pushing limits and dominating smart contracting and DeFi, more flavors of stablecoin will be launched, increasing activity, and therefore fanning demand for ETH used for paying Gas.
6. Developers are Eager to Build on Ethereum
However, an interesting development in all this is how developers have been flocking to Ethereum and learning a new programming language, Solidity. It is a high-level, object-oriented language for implementing smart contracts that execute on the Ethereum virtual machine.
In Nov 2017, there were 230 developers. Now, there are 2,300 developers from all over the globe, actively contributing code to make the base layer not only safer but resilient and reliable. They needed to participate. Ethereum is transiting to a new consensus algorithm to address scalability that in turn will help reduce Gas fees attracting even more users not only in DeFi but in other facets of Ethereum.
The first phase of Eth2 is live, and according to statistics, over 1.5 million ETH coins have been staked. Combined with DeFi activities—like yETH and locking to lend ETH, coins are actively being drawn out of circulation.
This alone has an effect on ETH prices since, as aforementioned, the utilization rate of Ethereum is high and the more ETH coins are removed from circulation, there will be more demand for ETH, pushing prices higher.
Bitcoin had a full five decades of settling before Ethereum. However, Ethereum is gradually emerging as a preferred asset for some institutions and is also constantly developing, improving its source code, flexible enough to meet the wants of its users. Eth2 is live and would use a new period where, in the next few years, would see ETH not only emerge as a superior platform transacting more value than Bitcoin, but its tokens evolve to be a store-of-value, better than BTC.
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