Since its foundation, the crypto industry has been standing on two pillars, BTC (Bitcoin) and ETH (Ethereum). However, Ethereum has been one of the most performant cryptocurrencies, only second to Bitcoin (BTC).
Bitcoin is often considered the crypto that set a benchmark for the industry in 2009. It is also considered the driving force behind the 2017 market boom, putting the crypto industry on the map.
But, when comparing the fundamentals between the two coins, Bitcoin loses its value faster than Ethereum. This comparison leaves keen investors and brokers with one similar question.
Will ETH beat BTC to be the ultimate crypto token?
Unfortunately, one cannot answer this question with a simple yes or no as there are many nuances you need to address first. So continue reading to look at some of these nuances and facts about Ethereum.
BTC Vs. ETH: What Sets Them Apart
While Bitcoin and Ethereum leverage the principles of cryptography and distributed ledgers, the two are very different technically. For example, transactions over the Ethereum network can contain executable code, while the data present over the Bitcoin network can only be used to validate transactions.
More importantly, though, it’s the overall use-case functionality that sets them apart. For instance, Bitcoin is an equivalent of store value, often referred to as crypto’s gold. On the contrary, Ether is used as a means of power to monetize and facilitate the operations over the Ethereum smart contract and the dApp platform.
Theoretically, since both the tokens operate over the PoW (Proof-Of-Work) consensus method, they shouldn’t be competing. But the popularity and functionality of ETH have pushed traders’ perspectives, making it the industry’s silver, close behind Bitcoin in terms of market capitalization.
Adding to the differences, we have news on ETH’s upcoming merge, where the token plans on moving to a proof of stake (PoS) consensus as a part of its Eth2 upgrade.
But will the new 2.0 upgrade give ETH the boost to take on BTC? Let’s figure it out in the following section.
So What’s The Merge All About?
Ethereum announced the merge, marking its transition from Proof-of-Work (PoW) mechanism to Proof-of-Stake (PoS) mechanism. In contrast, it might sound like a simple update to a few; it’s one of the industry’s most anticipated events. The upgrade to ETH 2.0 will transforms the age-old way of mining Ethereum (ETH) tokens.
The primary reason behind this transition is to reduce the overall computing power needed to mine Ethereum (ETH) tokens. Instead of using computers to validate and create new tokens, miners will now have to stake their existing Ethereum (ETH) tokens on the network to earn more rewards. Experts say this will reduce overall energy consumption by a staggering 99%.
Of course, this sounds great on paper, but the transition is not free from criticism. Unsurprisingly, most miners have opposed this transition to promote self-interest. But self-interest is not the only thing fueling this controversy.
Many people are genuinely concerned; most Ethereum (ETH) tokens are held by a couple of crypto giants such as Kraken, Coinbase, and Beacon Chain. Critics say this will limit decentralization in the network, which goes against the basic ideology of cryptocurrencies.
Ethereum 2.0: Expectations After The Merge
The crypto market and its stakeholders have been anticipating the upcoming 2.0 merger for quite some time. But people who had concerns about this move were not going to keep quiet about it.
As a result, some miners got together to create something called ETHW, the legacy version of Ethereum that still uses the Proof-of-Work (PoW) system. On the 12th of September, the group named themselves ETHW Core and tweeted that their mainnet would go live just 24 hours after the merge.
Of course, many investors might have their say about the token going through a fork. It is correct, as we have seen something similar with the release of Ethereum Classic (ETC). But no matter what, it is worth following the developments in this area to keep oneself updated.
The Repercussions Of An Upgrade Backfire
One must not presume the merger comes without risk factors. For instance, validators could now have the option to collude and facilitate malicious practices. Besides that, there is a risk of the Blockchain halting its production. Both of these factors will adversely impact the blockchain’s reputation and, eventually, its valuation in the market.
The NFT market will bear the brunt of this merger as most NFTs are based on Ethereum. In addition, things could get confusing quickly if there are many forks following the merge. This, in turn, will result in a spike in scams associated with NFT.
What’s Next For Ethereum Investors?
People who have invested in Ethereum for the long term can take the risk of these momentary ups and downs. Yes, the token might perform well following the merge, but that does not mean it is free of all volatility. Most experts, including Jerremy Schnieder from Personal Finance Club, believe that Ethereum (ETH) will no longer grow as it would have otherwise post the merge.
As with every other crypto, there can never be an absolute concrete guarantee that a token’s price will increase. This is also why most experts suggest you not invest more than 5% of your entire portfolio into cryptocurrencies. Before investing, you must evaluate all the risk factors to ensure they do not prevent you from reaching other financial goals.
But if you are someone who has matched all the benchmarks, then your ETH investments are safe, at least for the time being. But make sure you keep yourself updated with everything that is going on in the market.
Ethereum’s 2022 Until Now!
2022 has been an underperforming year for the crypto market, especially because Russia invaded Ukraine and China’s ban on cryptocurrencies. But despite that, most experts are optimistic that Ethereum will breach the $4000 mark again. According to an intelligence analyst from Bloomberg, Ethereum will end the year with a value ranging from $4000 to $4500.
But before diving into any further predictions, it is important to note that no expert can predict the price of a crypto token with total certainty. That said, not all predictions are optimistic for Ethereum (ETH), given the bearish performance of the market. Some suggest that Ethereum (ETH) is set for another significant crash. If their predictions turn, true chances are Ethereum (ETH) ‘s prices will drop to a low of $500 to $750.
Many experts also suggest that ETH’s volatility will leave Bitcoin behind due to its recent upgrade, commonly referred to as “The Merge.” While this is for the greater good, it would be worth noting how traders and investors react to this change.
That said, Ethereum’s performance in 2022 has been better than Bitcoin’s, which translates to ETH gaining more significance and recognition in the market. Besides that, Ethereum has recently been making the headlines with the “Merge.” As a result, many people are speculating if Ethereum will become the ultimate crypto token.
Bottom Line: So Will Ethereum (ETH) Be The Ultimate Token?
Before we answer whether Ethereum (ETH) will become the ultimate token or not, we first need to come to terms with the fact that there is no definition for the ultimate token. Hence there is no definite answer to this question either.
But given the characteristics of the Ethereum blockchain and Ethereum (ETH) token, it may qualify for the position of the ultimate token. Besides, one must not forget that Ethereum is one of the market’s first and most performant altcoins. Stay invested!