Will Ethereum be the new king?
Markets are often dominated by pioneers, and the market of cryptocurrencies is not an exception to the rule. This is especially true if we take a look at the top, how Bitcoin has been the king since its appearance and how it has managed to keep its competitors at bay.
But rules are made to be broken, so say many people, and Ethereum is very likely to be the one that will change the panorama. When markets closed for the last time on 2016, Ethereum owned roughly 4% of the market, while Bitcoin’s share was over 87%; these days the gap between the two is smaller than 10%, a situation that not even the craziest fortune teller would have predicted.
Since mid-May Bitcoin’s 24-h capitalization has been stagnant, fluctuating between 30 and 50 million USD. On the other hand, in the same period Ethereum has raised more than 200%, passing from a few more than 10 to approximately 35 million USD.
Bitcoin market capitalization: 1 month.
Price raises have played an important role, of course, as the market capitalization is given in fiat. Bitcoin has been impressive this year, growing in value between 150 and 200%; but Ethereum, there is no word to describe what the currency has achieved: an increment of more than 4000%, touching the 5000% line a few days ago when its price broke the 400-USD level.
What is supporting Ethereum?
The performance of a currency depends on the endorsement it has. Bitcoin prices have raised when it has gained mainstream attention, every time it is adopted as payment alternative by a reputed company, when an industry sector shows interest in the technology behind it, if a country issues positive legislation's on the matter and, no negative events have taken place recently.
Key events have been decisive for the future of Ethereum this year, ranging from public support by industry leaders, personalities, innovative features and media coverage.
The Enterprise Ethereum Alliance (EEA), established in the first quarter of 2017, brought interest from people outside the crypto world. Composed by big players like Microsoft, J.P. Morgan and Banco Santander looking to invest in developing solutions on top of the Ethereum blockchain; the move had a strong positive impact in the image of the coin.
The platform has hosted many ICOs in the last couple of months, including all-time record Bancor. The easiness provided by Ethereum to tokenize assets and automatize crowdfunding, and other activities through its smart contracts feature, have attracted entrepreneurs, innovators and developers.
South Korea has been one of those that have engaged with the currency, the ETH/KRW pair has represented up-to 50% of the daily Ether volume, currently standing at a respectable 1/5th of the total trading. With import names in the industry and a vigorous economy, being backed by the Korean market is not a minor victory.
The meeting between Russian president Vladimir Putin and Ethereum developer Vitalik Buterin is another probable boost to the Bitcoin rival, especially considering the traditionally negative position that Russia has had towards cryptocurrencies.
Finally, the United Nations have also given an accolade to Ethereum by using the technology to send humanitarian help to Jordan in the form of personalized vouchers. Further efforts are being conducted by the same organization to develop similar projects, involving seven agencies.
Why would Ethereum overtake Bitcoin?
Wide public support and no significant adverse events faced since the DAO hack, have Ethereum currently in a privileged position. Many investors are trading their BTC holdings into ETH captivated by the superb performance of Ethereum this year; newcomers also find it easier to take the Ethereum train since its price is still more accessible and the currency younger (i.e. with more potential ahead).
Tendencies are also a fact that cannot be ignored: since March Bitcoin has seen its market share free-falling while Ethereum has consistently improved in the matter. The gap has been closing more and more that people are already speculating about the date the “flippening” will happen.
Bitcoin vs Ethereum: Bitcoin against the ropes.
Both currencies have great potential, but is undeniable that Ethereum has an edge over Bitcoin. Besides the positive news that Mr. Butterin’s creation has received, BTC has been struggling with transaction times and the ongoing discussion of whether to increase the block size, take transactions off-chain or how to address the issue.
Micropayments, which used to seean opportunity in the Bitcoin blockchain, are now moving to alternative currencies due to the fees multiplying. Slow confirmation times are also scaring away possible investors, mainly from the banking sector, who are in need of fast transactions at low costs.
Unless a bug were found in the Ethereum platform, it seems very unlikely that the trend will revert. And, even if a vulnerability were discovered, the Ethereum foundation offers a generous bounty program to reward people for improving the network instead of attacking it, encouraging them to do “the right thing”.
Will Ethereum take the crown from Bitcoin? It probably will. The Zero Hour seems close, but markets are never predictable. Anything could happen, and tomorrow Ethereum might be worth nothing… but, pessimism aside, Ethereum is set to be the new king of cryptocurrencies!