Comparing two coins; Is Ethereum reaching Bitcoin?

Spread the love

Comparing and analyzing the current price of ETH and BTC, we understand that Ethereum is stepping into the limelight to reach Bitcoin. The ethereum price, surging more than 10% over the last 24-hour trading time frame and adding to gains of all almost 300% so far this year, remains far behind the BTC price—but as the number of bitcoin tokens “wrapped” into ethereum doubling in August, the situation is better for ETH.
Bitcoin can be wrapped onto the ETH blockchain using some ethereum-based tokens, such as WBTC, which has surged in popularity since May, according to Dune Analytics. In August, more bitcoin was wrapped onto ethereum than was created by bitcoin miners.
Bitcoin wrapped onto the ETH blockchain using WBTC is backed by BTC and minted by locking up bitcoin on its blockchain. It’s thought that by wrapping bitcoin onto ethereum and making it compatible with smart contracts, traders will be able to unlock tools such as lending, liquidity provision, and decentralized exchanges.
“This presents an interesting quandary for bitcoin. While it clearly has more utility after being converted onto the ETH blockchain, its underlying value ostensibly comes from the 68 terawatt-hours of power that go into securing the bitcoin blockchain each year,” Glassnode analysts said.
“How much bitcoin has to migrate onto ethereum before the necessity of the bitcoin blockchain itself starts coming into question,” Glassnode asks. “And, if this were to occur, what would back the value of bitcoin if not the massive amounts of energy that go into maintaining its existence?”
Meanwhile, the ethereum price is increasing, boosted by the decentralized finance (DeFi) craze that’s currently sweeping the bitcoin and crypto world. DeFi is the idea that cryptocurrency can be used to recreate traditional financial instruments such as loans and insurance.
“Following a challenging number of weeks for many crypto-assets, ethereum’s price increase shows it is one of the main alts leading the market,” Simon Peters, bitcoin and crypto analyst at investment platform eToro said.
“I agree with Glassnote’s reports that bitcoin is no longer investors’ first steps into crypto—many new investors may be entering the market directly into ethereum or DeFi protocols, rather than choosing bitcoin as their first or only crypto investment as they did in the 2017 crypto bull run.”

Leave a Reply

Your email address will not be published.