What are the real chances that Ethereum can dethrone Bitcoin – will it happen this year?

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Many are the analysts and experts who consider that Ethereum has all the options of being able to dethrone Bitcoin and crown itself as the leading cryptocurrency. Although this is not expected to happen anytime soon, nor is Bitcoin expected to make it easy for you.

Who will remain king of the decentralized world?

The biggest reason that has allowed cryptocurrencies to exist together with the traditional finance, is he growing number of users worldwide, to which they were presented savings alternatives, payment platforms or investment instruments that were previously not available, either due to lack of availability in your region or because you do not even have access to bank accounts to manage daily expenses. This has paved the way for the adoption on a large scale, present itself as a achievable goal on the digital asset road ahead.

It cannot be doubted that Bitcoin continues to be the largest and best known cryptocurrency worldwide, the market capitalization that places it at more than 878 billion dollars, he is able to turn on approach his second contender, however, the opportunities presented through the exchange of tokens No Fungibles (NFT) in conjunction with decentralized finance (DeFi), appears to be reversing the investment appeal of conventional fund managers.

Updated weekly chart of Bitcoin, since mid-2020 Bitcoin’s market capitalization has soared to more than 1000%

One of the main problems facing Bitcoin regarding your inclusion in the equity market traditional, is that it is designed to supplant the ancient conceptions that are had with the fiat money, which would mean taking all the economic system that we currently know, towards a destination disruptivo that society has not yet validated as necessary.

– “The purpose of Bitcoin is decentralize the exchange of value, settling the trust risk associated with FIAT money transactions. Despite having these characteristics, it does not seek to be able to offer a profile to the traditional investors to break into that market. Although Bitcoin is based on the premise of being a real asset, it does not move in the same way as the common financial instruments “

What are the differences between Bitcoin and Ethereum?

Going to the basic understanding of the differences between Bitcoin y Ethereum, the objective of the latter it is not in becoming the standard of use for monetary reserves of the world, instead, it seeks to offer developers access to code that can be validated by the conditions that are proposed for its use. This would mean, programmable agreements that present conditions that cannot be altered, and that in addition, their purpose of use is validated by submitting Tokens generated in the network. This idea is what has allowed us to have access to decentralized platforms, where the acquisition of assets is not determined by a central entity, but rather by the agreements between parties that are reached by users such as the Axie Marketplace, Bored Apes, or Specialty Applications in the loan of cryptocurrencies.

eth weekly

Updated weekly chart of Ethereum, like Bitcoin its market capitalization has tripled in the last year

One of the most significant problems, which drives away big investors of participating in Bitcoin beyond the acquisition of an ETF in the stock market, can be found in the volatility variation that the price of the asset generates daily. Although all cryptocurrencies with an exchange rate that is not linked to any tangible asset, they suffer from these abrupt changes in price. When a cryptocurrency has a utilitarian purpose in a service that is presented as necessary, that exposure to volatility is reduced.

Another of the samples that allow us to view where is the interest of entrepreneurs linked to Wall Street, can be found in the inversion of $ 30 billion for the startups based on decentralized technology. And this is because Bitcoin does not offer forks that change its original concept.

investments in decentralized technologies

Graph that represents the amount of money invested through Venture Capital, in companies linked to the development of software and cryptocurrencies

Now, the proposals based on Ethereum and concepts such as Web 3.0, can be used by any entrepreneur with knowledge of software development, devising within the chain, proposals that have not even been thought by the creator of the Vitálik Buterin protocol. It is then that it can be thought that the greatest attraction that will be generated with all the cryptocurrencies linked to the development of smart contracts such as Solana, Avalanche or Fantom (to take into account that although Ethereum is not currently the most economical protocol in terms of transaction fees, it is the one with the highest capitalization in the market) is the availability of offering financial services focused directly on the consumer who needs them, thus attracting more users who did not see interest in cryptocurrencies, to participate in the sector.

It seems that seeing the king of cryptocurrencies dethroned is something that is not expected to happen shortly, however, if the usefulness of this type of decentralized applications becomes more common to implement than the mechanisms offered in traditional finance, it is only a matter of time for the market to pivot to where the greatest amount of money is available, and for that to attract the greatest number of users.

Fountain: https://pl.tradingview.com/symbols/BTCUSD/

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What are the real chances that Ethereum can dethrone Bitcoin – will it happen this year?

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