Since the beginning of the year, Ether (ETH) has significantly outperformed Bitcoin (BTC): the price of ETH has in fact grown by 320%, while that of BTC “only” by 54%. However, according to Bloomberg Intelligence analyst Mike McGlone, Bitcoin will soon reach the gains of Ether – this could bring the value of a single BTC to $ 100,000.
“If Bitcoin were to catch up with Ethereum’s performance this year, the price of the number one cryptocurrency would approach $ 100,000.” has tweeted the analyst on August 9, when Bitcoin broke through the $ 46,000 wall.
While McGlone did not dwell on why he believes Bitcoin will achieve the same annual growth as Ether, he cited a few factors in his previous cryptocurrency report that could push BTC’s price to six-digit value:
“About 80% of Bitcoin and Ethereum, most of the performance of the Bloomberg Galaxy Crypto Index (BGCI), comes from the perception that the first cryptocurrency is a digital and global store of value, as well as from the rapid digitization of finance and the system. monetary. “
Thousands of billions of dollars awaiting regulation
Bitcoin advocates believe the cryptocurrency can compete with the US dollar and become the world’s reserve currency. The main reason behind this prediction is that Bitcoin’s maximum supply is fixed: there can never be more than 21 million BTC. On the contrary, the Federal Reserve is constantly printing new dollars: in 2020 alone, the US central bank minted 3.1 trillion USD.
This is probably why Bitcoin finished 260% higher last year, demonstrating that investors bought the cryptocurrency for counter the rising dollar inflation.
In a survey conducted this year, Goldman Sachs identified potential strong demand for Bitcoin among institutional investors, including pension funds, global sovereign wealth funds and foundations. However, the lack of clear regulations for the crypto sector has prevented these large investors from entering the world of digital assets.
Autonomous Capital Management analysts said an Exchange-Traded Fund on BTC would accelerate Bitcoin adoption among institutions. They also believe that although Bitcoin is considered a highly volatile asset, its poor correlation with other markets is a very attractive factor for these companies.
Autonomous analysts finally stated:
“If we assume that Bitcoin has the same weight as gold in investors’ wallets, its price should be 2.8 times higher, or about $ 112.00.”
Rivalry with Ethereum
Despite its adoption prospects on Wall Street, Bitcoin’s dominance has dropped dramatically from its peak of 73% reached in December 2020. Its dominance currently fluctuates at around 45%, demonstrating that traders have shifted their investments. on other digital assets.
Ethereum, in particular, has become the main beneficiary of the decline in Bitcoin’s dominance index: the percentage of the overall market cap represented by Ethereum has grown from 10% in December 2020 to 20% at the time of writing.
Part of the reason behind Ether’s growing dominance is due to the boom in NFTs – digital files whose scarcity and uniqueness can be demonstrated via blockchain. The growing popularity of decentralized finance, which allows users to lend money, obtain loans and perform other activities traditionally associated with the banking sector on blockchain, has also helped to increase the adoption of Ethereum among the masses.
Ethereum developers are also taking steps to increase the scalability of the blockchain. This month the highly anticipated London update was introduced, and in the future the blockchain will move to a Proof-of-Stake consensus system.
The London hard fork includes the EIP-1559, which aims to reduce gas fees for users and introduce deflationary pressure on supply. On the first day alone, ETH worth two million dollars was burned thanks to the EIP-1559.
According to the Ultrasound Money website, over 21,000 Ether has been burned to date.
Related: Vitalik: Following London’s success we are more confident about moving to Proof-of-Stake
McGlone noted that, based on past performance, Ether could outperform Bitcoin in terms of market cap as early as 2022 or 2023. The analyst still maintained its target price of $ 100,000 for Bitcoin:
“While we believe Bitcoin will continue its growth path, Ethereum’s flippening process is virtually inevitable.”
To date, Ethereum has surpassed Bitcoin in terms of the number of transactions on the network and overall fees, according to data from the Blockchain Center.