There are Bitcoins and then there are Altcoins.
Well, that was certainly the case until now. Ten years have gone by with Bitcoin being an absolute benchmark for digital assets, and its stratospheric value which peaked early this year and then suddenly restored itself to all time highs once again after the US Securities and Exchange Commission (SEC) announced that it was looking at implementing a full framework for regulation of cryptocurrencies.
Could it be perhaps that Ethereum will rise away from being an altcoin, and disrupt the hierarchy that currently stands Bitcoin out against other digital assets?
Given the welcome that many enthusiasts and first-time cryptocurrency investors gave the wave of volatility that engulfed the cryptocurrency world in May this year as a result of Elon Musk’s infamous tweet, and then the SEC’s announcement led by longstanding financial regulation figure Gary Gensler who is the SEC’s current chairman, the race is now on for supremacy among the top cryptocurrencies.
Yes, Bitcoin’s value is tremendous and sets an absolute record for the valuation of any tradeable asset or store of value in history, however the technological advancement of Ethereum is now very much on the radar for many participants, largely due to its huge capability with regard to smart contracts and the ever-increasing development of its blockchain which is extending the possibilities and use cases of the entire decentralized finance (DeFi) arena.
As a result of this, and the many blockchain projects that now use Ethereum as a mainstay, including our very own XCM native token which is built on the ERC-20 blockchain protocol, Ethereum is now being watched carefully by some very seasoned investors.
One particular cryptocurrency millionaire from the younger generation – 24 year old Rahul Rai who co-heads Market Neutral at BlockTower Capital, has made his view clear that Ethereum will likely overtake Bitcoin as the most prized digital currency within the next six months.
That is a very bold estimate, given that Bitcoin’s current value is $66,090 whilst Ethereum’s value is a fraction of that and stands currently at $4,734, however that in itself is a massive leap ahead of Ethereum’s value this time last year, when it was 10 times less valuable at $460.
We are in the age of the cryptocurrency and DeFi revolution, and the values show that clearly. This particular trader, however, who is a successful cryptocurrency hedge fund manager and is part of the all-important Generation Z demographic whose lives are likely to be far more shaped by DeFi than any adult generation worldwide over the next few years.
Rahul Rai believes that we will witness what is known in cryptocurrency circles as ‘flippening’ within the next few months. Flippening is a term that indicates Ethereum overtaking Bitcoin as the number one cryptocurrency.
A further bastion of confidence in Ethereum is CME Group’s launch last week fo micro Ethereum futures, which is a step the same exchange took with Bitcoin futures a few years ago. CME Group is the world’s largest electronic derivatives exchange operator.
Rahul Rai said over the weekend that he thinks there is a very good chance for Ethereum to surpass Bitcoin and that it could well happen in 2022.
Focusing on the technological and use case possibilities afforded by Ethereum, Rahul Rai says that Bitcoin is a store of value, rather like a digital form of gold. This is a viewpoint that has been widely held for sometime relating to Bitcoin, however Ethereum is a layer one network that allows payments, lending, trading and staking. It enables peer-to-peer activity without a broker or bank as an intermediary. Unlike bitcoin’s network, the blockchain is programmable, meaning it can run other applications such as smart contracts, NFTs and even the metaverse.
With Layer 2 technology now in the mix, and protocols such as UniSwap V3, there is clearly an entire financial technology ecosystem being built around Ethereum, hence predictions of increased popularity should not be so outlandish.
Given this, the best possible fiat on and off ramp is paramount in order to ensure that access to the full range of services offered by Ethereum from smart contracts to payments, lending, staking and other financial products on the blockchain, CoinMetro is the go-to venue with the most effective fiat on and off ramp.
Onwards and upwards!