Can ethereum “crush” bitcoin as the market plunges?

This article will focus on comparing bitcoin and ethereum based on current market conditions and explain why ethereum is “crushing” bitcoin.

Like most other cryptocurrencies, Ether uses blockchain technology to build a decentralized computing network where every participating user holds the same copy of a public ledger contract.

Bitcoin, on the other hand, is by far the most popular and valuable cryptocurrency, and the first to use peer-to-peer technology for online payments and transactions.

At one point in 2021, the price of Bitcoin soared to a peak of $63,000, but recent regulatory tightening in the country has led to a decline in the price of Bitcoin, which at the time of this writing has fallen to $32,695.56 according to Coingecko data.

This article will focus on comparing bitcoin and ethereum based on current market conditions, and why ethereum is “crushing” bitcoin.

For those in the digital currency industry, there is growing speculation that ethereum will outperform bitcoin in 2021.

For example, Charles Hoskinson, founder of Cardano (ADA), recently said that he believes Bitcoin is at a significant disadvantage to other cryptocurrencies due to its slow speed, and could lag behind other projects that use proof-of-stake (PoS) consensus algorithms.

If I had to bet between the two systems, he said, I would say that nine times out of 10, ethereum would win the battle against bitcoin.

The reason for this opinion is that while the price of Bitcoin has plummeted in recent weeks, Ether has performed relatively strongly during the general decline in the value of the digital currency market, and has managed to “capture” nearly 19% of the total digital currency market capitalization.

Not only that, but during the market rally, while Bitcoin price was up around 42-43%, Ether was up a whopping 280%.

As a result, the crypto community has found that ethereum seems to have started “crushing” bitcoin, and even feels that now may be the best time to invest in ETH, so is this really the case?

There is speculation in the digital currency market that Ether could continue its bullish trend and reach a 5-digit or higher value in the near future.

But for now, the price of Ether is now largely fluctuating around $2,000 due to market turmoil and a “brutal” correction due to the recent increase in regulatory pressure, which has led to panic in the market.

At the time of writing, according to Coingecko data, the ETH price is at $2013.24, down 16% in 24 hours, which is still a big gap compared to the historical high of $4,700.

However, the current short-term panic in the market has not affected the pace of Ether’s development, and if you pay attention to some key indicators, you will see that almost all of them show growth, and if you just look at its growth rate, it may even reach the “trillion dollar market cap” level in the near future.

Because in the last 12 months, the total value locked in Ether smart contracts has grown by more than 9,000% and the number of users has grown tremendously.

Can ethereum "crush" bitcoin as the market plunges?

The chart above is from Statica, from which we can see that the growth pattern has reversed in recent months due to market correction and panic, especially in recent weeks, when Ether prices have fallen.

But on the other hand, we also find that Ether users are indeed increasing and the business growth pattern is reasonable, factors that seem to suggest that Ether has the potential to grow to the “trillion dollar” level of the market.

The growth in the number of Ether users could be driven by several factors.

  1. users “simply” buying and holding ETH.
  2. Users need to send stablecoin (or similar digital currency) transfers.
  3. Users using DeFi to do some borrowing or lending activities, or income farming (liquidity mining) activities.

4, users purchase transactions such as insurance policies or lottery tickets.

Recent data also shows that the volume of decentralized transactions on the Ether blockchain has grown by 8,500% in the last 12 months, a metric that reflects the significant growth in both the size of the Ether user base and the size of the real economy.

This is because people can now do many things on Ether, including running decentralized applications, making transactions, and more.

It goes without saying that economic activity on the ethereum blockchain is increasing and, at least from this perspective, ethereum is “crushing” bitcoin.

Frankly, while Bitcoin has facilitated the emergence of new things like the sovereign network and the lightning network, and there were high hopes for these new things and new frameworks, the reality doesn’t seem to be as good as it could be.

What we’ve actually seen in the lightning network, for example, is that not many people are locking bitcoin into the network because bitcoin really isn’t very good for payments.

In most cases, the total amount of bitcoin locked into the lightning network has not gone up significantly, and the lightning network has not grown in size accordingly.

In contrast, the size of the ethereum ecosystem, and the total amount of ethereum on-chain settlements, have exploded, which is absolutely incredible – the average daily on-chain settlement for ethereum is currently $46.37 billion.

That compares to about $15 billion in bitcoin, and most bitcoin on-chain settlement transactions come from investors and traders who simply send bitcoins to exchanges to sell for cash, or buy them on exchanges and then withdraw them to cold wallets to keep.

In fact, while Bitcoin is just something called “digital gold,” people can do a lot of interesting things with Ether.

You don’t see many applications based on bitcoin, do you?

In addition, Bitcoin mining also has more serious energy consumption issues, compared to Ether which is moving away from Proof of Work (PoW) to a low energy Proof of Stake (PoS) consensus algorithm, which then eliminates a host of environmental issues associated with mining.

If we compare ethereum and bitcoin from these perspectives, we may feel that bitcoin cannot match ethereum in terms of the amount of infrastructure and energy usage.

Ether is being upgraded in the transition to proof of stake, while Bitcoin is a very conservative digital currency, and if Ether 2.0 is completed successfully, its network will run on perhaps a thousandth of the energy used by Bitcoin.

Ether is “destroying” Bitcoin because –

The Ether ecosystem can provide developers with a huge store of value.

Ether provides a solution for creating entirely new applications.

Ether provides the infrastructure for most decentralized financial applications.

Ether will reduce its carbon emission rate from 4.5% to 0.5%.

Ether will soon upgrade EIP-1559 to introduce a deflationary mechanism in ETH, with each transaction turning ETH into a deflationary asset, meaning that the token’s store of value properties will become increasingly visible, subsequently driving prices further up in the coming years.

Even as a store of value, ethereum is superior to bitcoin. In May this year, institutional money flowing into Ether surpassed Bitcoin for the first time, which is clearly an important signal for this highly promising digital asset.

With Ether about to complete all its upgrades in the near future, market performance is bound to show exponential growth.

Posted by:CoinYuppie,Reprinted with attribution to:
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