The crypto is always up for discussion. The industry is made of experts who major in crypto runs and the general crypto outlook. The latest topics in the crypto world have mostly revolved around the possibility of Ethereum overtaking Bitcoin in terms of market capitalisation in the future.
Most of the people who believe Ethereum will overtake Bitcoin base their argument on various factors like the recently launched Ethereum 2.0. The new network uses the energy-efficient Proof-of-Staking mining protocol. Bitcoin on the other hand sticks to the energy-intensive proof of work mining. This has led to crypto bans in China and by Tesla. Some people also look at Ethereum’s lower cost for ease of opening a large trading margin.
However, looking at it closely, Ethereum is no threat to Bitcoin and would not overtake it in the future. Below, we’ve listed some of the reasons why.
1) Bitcoin has more active addresses
The news that Ethereum had surpassed Bitcoin on active addresses showed that maybe the future was Ethereum. However, the major accounts staying predominantly shows Bitcoin still has the pulling power.
To understand the active addresses, look at the accounts excluding the ones holding low amounts. Accounts with extremely low amounts tend to be those unsure of the crypto market and are never going to trade. Given Ethereum’s low value, they are likely to put little money on Ethereum compared to Bitcoin.
Currently, Bitcoin has around 6 million active addresses holding BTC worth more than $1000. 3.67 million of these addresses have been made from 2020. On the other hand, Ether has around 2.7 million accounts worth more than $1000. 2.4 million of these accounts have been created since 2020.
It will take Ethereum ages before it can catch up with Bitcoin’s number of active addresses.
2) Bitcoin and Ethereum future investment disparities
Other than purchasing the coins, investors looking to avoid the crypto risks tend to invest in the crypto futures. They are offered by the traditional financial institutions hence are more regulated and stable.
Data on the aggregated publicly traded crypto products shows that Bitcoin has $32.3 billion assets under management compared to Ether’s $11.7 billion. This can be due to Bitcoin’s longer presence on futures trading. The Grayscale Bitcoin Trust was launched in 2013, while the first Ethereum futures XBT’s Provider Ether Tracker was launched in 2017. While the futures have less impact on Ethereum vs Bitcoin price prediction, it shows the general crypto outlook.
3) The rise of formidable competition for Ethereum
Even though Bitcoin and Ethereum dominate the crypto market, various crypto projects have risen to rival them. Meaning there is more than Ethereum vs Bitcoin in the crypto market. Compared to Bitcoin, Ethereum has more formidable competitors. Ethereum is Bitcoin’s only challenge in terms of market cap and use cases.
For Ethereum, several cryptos that support smart contracts and support decentralised applications are available in the crypto market. Some of the popular ones include Cardano, Chainlink, Ethereum Classic and Stellar. These options come with even faster transaction speeds and more scalability. Therefore, before beating Bitcoin it has to ensure it keeps the other competition at bay.
