Bitcoin could be booming 430%, but Ethereum could still steal its thunder
Bitcoin believers may have new reasons to rejoice after the stimulus checks, but Ethereum has use cases on its side. U.S. President Joe Biden’s $ 1.9 trillion COVID Relief Bill has passed Congress and stimulus checks will be distributed soon. Early signs suggest recipients are ready to buy bitcoin. A survey by Mizuho Securities found that of 235 respondents expecting stimulus checks from the COVID Relief Bill, 10% are interested in investing in Bitcoin. It’s a small sample size, but according to the survey, investing in Bitcoin was a more popular answer than investing in traditional stocks. If that kind of runaway popularity doesn’t bother you, keep in mind that it could lead to $ 40 billion flowing like a river straight out of Biden’s $ 1.9 trillion stimulus package into Bitcoin. That same week, Bank of America strategists suggested to Bloomberg to move the price of BTC 1% off for just $ 93 million. Bank of America strategists said in a statement to Bloomberg on Wednesday: “Bitcoin is extremely sensitive to the increased demand for dollars. We estimate that a net inflow of only $ 93 million into Bitcoin would result in a 1% increase in price, while this would also be the case for gold closer to 2 billion US dollars or 20 times higher. In contrast, the same analysis for the over 20-year government bonds shows that multi-billion dollar cash flows have no significant influence on the price, which on the lot Larger and more stable nature of US Treasuries indicates markets: “If you participate in the survey and forecasts at face value, you can assume that Bitcoin prices will be boosted by the inflow of $ 40,000,000 from the invested US COVID aid money will increase by over 430%. See also: How do I buy Bitcoin (BTC)? It seems reasonable to expect the 12 month bitcoin bull run to continue making it the 2021 crypto success story, right? DeFi Might Steal Bitcoin’s Thunder Before the Bitcoin bull run, DeFi was a tough competitor as the most dominant story in cryptography. BTC’s new price heights have put the world’s most famous cryptocurrency back into the spotlight. Bitcoin may always be the star of the crypto world and has certainly seen great popularity and acceptance as a store of value, but Ethereum’s fortunes in general have kept pace with Bitcoin, and possibly surpassed it since late last year. Since December 2020, Bitcoin has risen from over USD 28,000 to over USD 58,000 (plus around 207%). Ethereum has grown from more than $ 746 to over $ 1800 (up 240%). This week Bank of America released a report entitled “Bitcoin’s Dirty Little Secrets”. Excerpts from the report are unflattering for the world’s most famous cryptocurrency. Some of the statements from the report include: “The main argument in favor of Bitcoin is not diversification, stable returns or inflation protection, but mere appreciation …” “There is no good reason to own BTC unless you see prices rising. . “And they point out that the environmental impact of Bitcoin is undesirable, stating,” We estimate that an inflow of $ 1 billion into Bitcoin is equivalent to 1.2 million cars driven over the course of a year , or 12.7 million barrels of oil. “They continue to praise the virtues of Ethereum and state in the report:” Bitcoin is the most talked about cryptocurrency, but Ethereum is [the blockchain] offers more features, including a more flexible decentralized finance (DeFi) alignment than the Bitcoin blockchain. “” However, DeFi is demonstrating the ability (distributed ledger technology) to provide funding. We believe one of the best differences against DeFi disintermediation is that mainstream finance seizes those opportunities. “The Hopes and Fears of DeFi … As a digital currency, Bitcoin is simply designed with a limited scope compared to Ethereum with smart contract features. Ethereum is arguably the necessary continuation of Bitcoin’s success. But how will their performances compare in 2021?” Bitcoin is the tool of choice for investors looking for valuable investment properties in the cryptocurrency market. Success, then, is a sustained increase in the price of that asset. And appreciate it as long as investors continue to believe in the future of blockchain and cryptocurrencies. Ethereum, on the other hand, is not just a cryptocurrency. It is a network that supports Smart Contracts, Dapps (decentralized applications) and Defi (decentralized finances). Investors looking to invest in emerging technologies should pay special attention to this crypto asset. There is currently over $ 41 billion trapped in DeFi projects on the Ethereum blockchain, compared to $ 4 billion just 8 months ago. This is what success looks like for Ethereum this year as well – continuous expansion and innovation, “said Tally Greenberg, Head of Business Development at Allnodes. Phase 0 of Ethereum 2.0 – known as” Serenity “- started on December 1, The Hope for One Upgrading the Ethereum network aims to meet the requirements for speed, efficiency and scalability. “BTC is unlikely to be dethroned as the leading cryptocurrency, but the growth in the Ethereum blockchain is hard to bet against. They are of course compared “with each other”, although this makes little sense from a functional point of view, since each competes for separate and mutually beneficial use cases. BTC’s ‘Digital Gold’ narrative is straightforward, which has a positive impact on attracting new users who may be intimidated by the seemingly more complex and dynamically evolving ETH narrative, “said Jason Peckham, an analyst at Invictus Capital. It It remains to be seen whether Ethereum 2.0 will handle the need for speed to support the DeFi use cases. “To me, Ethereum looks very attractive for long-term purchases as it has a much greater technical application potential than Bitcoin. Ethereum’s blockchain programmability offers incredible growth opportunities. Bitcoin, with its limited emission, is more of a tool for saving and paying. Ethereum, in turn, is a tool for the real use of blockchain technology in third-party projects, “said Dyanis Zabauski, CEO of Coinmatics. But no matter how real the real use is – can Ethereum compete with the price development of Bitcoin?” I think It is very likely that ETH will beat BTC in 2021 in terms of price development … Ethereum has not fully realized the benefit of the growing popularity of DeFi services and NFTs. The exploding NFT market will directly benefit the value of ETH, and I think ETH has room for growth until its price includes the current excitement about NFTs. “Noam Levenson, cryptocurrency writer and founder of Narrow Straight Writing. Some pundits point out that performance is lagging reason to keep an eye on Ethereum as we may see a lot more movement in 2021.” From a relative performance standpoint, the second largest ETH Bitcoin’s cryptocurrency is only 20% behind its all-time high against Bitcoin of 175%. In previous cycles, we’ve seen ETH catching up on BTC growth as BTC begins to correct as profits from BTC are converted into altcoins. Since ETH is one or two cycles away from BTC in its growth cycle, it makes sense that the laggard’s return outperforms BTC’s larger market capitalization from here, “said Jake Wujastyk, chief market analyst at TrendSpider. Until Ethereum 2.0 was a well-known one Size is there will be doubts about its ability to meet the already enormous need for bandwidth to support transactions. “Ethereum could outperform Bitcoin in terms of percentage profit this year. So far, ETH has gained almost 150% in value in 2021, while Bitcoin has increased by around 90%. However, ETH is unlikely to take over market capitalization as Bitcoin is the cryptocurrency that most people are behind in terms of adoption and usage. Many consider Bitcoin to be digital gold, and large corporations and institutional investors are adding it to their balance sheets. Ethereum in its current iteration is not scalable and acts more as a platform for decentralized applications than a store of value, “said Ben Weiss, President and COO of CoinFlip. The launch of an improved Ethereum network is a testament to the strength of the project – but it also represents Change. Change conveys risk – while Bitcoin simply, unchangeably and constantly gaining in value. “I’m not yet convinced that DeFi is as groundbreaking as its followers think it is right to be. The idea of high-yield farming sounds a lot like a hot potato with smart contracts, with investors jumping from project to project hoping they won’t be the last to hold their bags, “said Don Wyper, COO, DigitalMint. Institutional Investors have been key in increasing the value of Bitcoin over the past 12 months. Will the same traditional investment giants turn their attention to Ethereum? “After all, some institutional investors will buy ETH to increase their crypto exposure while others will acquire the recently introduced CME ETH futures will trade (Interest is still low with a volume of 8% of the CME BTC futures. Others will acquire ETH to use and experiment with some of the applications, especially in DeFi. I see short term though not much movement that compares to Bitcoin, “said Jason Lau, COO at OKCoin. Conclusion How many Befra As stressed, comparisons between Ethereum and Bitcoin make sense from an investor’s point of view, but the comparisons don’t go much further. “BTC and ETH are different: BTC is a currency token while ETH is a utility token. When mainstream institutional investors get into ETH, it means that mainstream institutions not only see the current value of ETH, but the whole as well Validate Ethereum ecosystem. We haven’t seen any evidence of mainstream institutions getting involved in Ethereum’s applications. For institutional investors to get on board, it would take more time and market education through 2021 and beyond, “said Haohan Xu, CEO of Apifiny. A shift in mainstream understanding – or even a mild learning curve – might be needed. – To get traditional investors who have tried the familiar Bitcoin to understand the power of DeFi, but it seems that the mighty bull market is lifting all ships in the crypto world and institutional investors are already getting on board. “Institutional investors are already getting on board with Ethereum. Just recently, Grayscale, the world’s largest crypto asset manager, bought more Ethereum than Bitcoin for a change. The Chinese stock company Meitu also packed 15,000 ethers not so long ago. The ETH funds from Galaxy Digital raised $ 32 million in less than a month. The launch of Ethereum Futures on the CME, the launch of Canadian ETH ETFs and we’re just scratching the surface here … I expect another surge in institutional investment in Ethereum. This is just the beginning, “said Greenberg. Cover image modified from photo by Mater Miliano at Pixabay. For more information from Benzinga, click here for option deals from BenzingaNFTs – From Digital Gold to Gold Foil Collectibles. © 2021 Benzinga.com. Benzinga does not offer investment advice. All rights reserved.