Classic match – Will the development of the cryptosphere necessarily be accompanied by a fall of bitcoin (BTC) from its throne? Ethereum (ETH) has favored the prognosis of this analyst.
Bitcoin vs Ether: BTC advantage, but maybe not for 2022
On December 17, 2021, Jurrien Timmer, Director of Global Macro at Fidelity Investments, publishes a series of tweets comparing the growth of Bitcoin to Ethereum. It is based for this on the valuation of the network, rather than on the price of cryptocurrencies. This valuation corresponds to the market cap / network ratio.
The valuation of ether is currently lower than that of bitcoin. Bitcoin benefits from its ‘higher scarcity dynamic’ that appeals to investors. But if “the bitcoin network is growing steadily, that of Ethereum is growing rapidly.” For Trimmer, “ it will be interesting to see if ETH will continue to catch up with BTC in 2022 “.
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Ethereum ahead of Bitcoin, digital gold ahead of physical gold
Can the valuation of ether actually exceed that of bitcoin in 2022? Ethereum’s switch to proof of stake, which is expected to resolve scalability issues facing the current version of the network, could further encourage the uptake of ether and thereby make Timmer’s predictions a reality.
The deployment of Ethereum 2.0 should allow the network to support the growing weight of DeFi protocols and NFT projects that call it home, sectors which have experienced strong development in 2021, and which should continue to register strong growth in 2022.
It should be noted in passing that the director of Global Macro is not a detractor of bitcoin, his forecasts do not therefore aim to shoot the latter. Trimmer had published a 12-page document on bitcoin in March 2021, with positive conclusions on the king of cryptocurrencies. He notably underlined that “bitcoin has become mainstream”, becoming a “legitimate asset class”. Trimmer also stated that “ bitcoin will take more market share from gold over time “.
However, will the growth of ether come at the expense of bitcoin? This would be the ideal scenario for detractors of the latter, such as this parliamentarian who hopes to see cannibalization between cryptocurrencies.
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