Over the years, the price of bitcoin alongside other cryptocurrencies like ethereum has been remarkable. Although several other cryptocurrencies are doing brilliantly well, Bitcoin and ethereum seem to be on another level of advancement. These two giant cryptocurrencies are the top 2 in the crypto community, bitcoin and ethereum. Their prices and price trends have been somewhat outstanding with interesting user adoption. Earlier this year, the price of bitcoin and ethereum enjoyed a price surge of 30% and over 20%, respectively, putting the prices of both coins way ahead of others. Nonetheless, ethereum seems to have more edge over bitcoin as experts predicted the price of ethereum goes as high as $4,600 by the end of the year. Ethereum today has the capacity of overdoing this price range before 2021 runs out, all things being equal.
It is now news that most cryptocurrencies follow bitcoin’s trends, and ethereum, for one, is one of those cryptos. However, the halving cycle relationship between bitcoin and ethereum may just begin to decouple as ethereum continues to develop achievable use cases than bitcoin. The price of ethereum might grow at a faster rate compared to the price of bitcoin. Nonetheless, there are several factors that need to be considered before this can take place.
How can ethereum outperform bitcoin?
This is one of the most controversial questions in the crypto space. There have been several assumptions and comparisons between these two coins. The question of whether ethereum has the capacity to outshine bitcoin is somewhat feasible because of the price volatility in the crypto space generally. However, user adoption, total supply and circulating supply are also some of the factors to consider. Bitcoin has been in existence since 2008, and its aim remains to be the future of money and replacing fiat. This, however, is different from the aim of ethereum. However, there are certain factors that could spike the price of ethereum, and there are some problems that need to be fixed before these factors could be adopted, and some of the problems include the following.
Efficiency and scalability
Discussing ethereum’s issue with scalability and efficiency could take a long read. The ethereum network recently has been undergoing rigorous upgrades and transitioning into Eth 2.0. This upgrade has been in play since the end of 2020 and is the reason behind the bullish predictions of ethereum in the first three months of 2021. There’s much to understand about ethereum price and the factors that have contributed to its present price. Earlier this year, Vitalik Buterin mentioned upgrades are undergoing on the ethereum network as well as burning of ether tokens, and this act is one of the major steps to putting ethereum ahead of bitcoin.
In other to solve the issue of scalability and efficiency on the ethereum blockchain, ethereum is expected to complete its upgrade from the proof-of-work consensus to the proof-of-stake later this year or by 2022. This will help solve the issue of scalability and efficiency and mean a cut in the ethereum supply. This deduction in total supply could be done by burning ether, which will cause a reduction in ethereum’s circulating supply and force the price of ethereum to increase to about twice its present all-time-high –about $8,000. The reduction in circulating supply will also make ethereum a better cryptocurrency for the store of value than bitcoin. Remember that ethereum has some other important utilities that it provides apart from being a cryptocurrency that bitcoin lacks.
Another salient reason to take care before considering ethereum as worthy crypto to outperform bitcoin is the transaction charges. The ethereum network is arguably one of the fastest networks with pocket-friendly transaction charges. However, as the blockchain begins to undergo congestion and several users begin to adopt ethereum, its transaction charges skyrocketed, resulting in a reduced adoption rate. Currently, ethereum’s price is almost five times its transaction charges which are ridiculously high. However, with the eth 2.0 upgrades, this and other problems should be resolved.
A panel having an average of 42 crypto analysts predicted the price of ethereum to be somewhat above the $4,500 point by the end of 2021. For the long-term, ethereum’s price prediction was pegged at an average of $17,800 by 2025 and around $71,000 by the end of 2030. At the end of this prediction, 68% of these analysts believe ethereum will outperform bitcoin in the long run. The price of cryptocurrencies is never accurate with mere technical analysis as cryptocurrency is volatile, and there are several forces influencing the price of every coin.