Ethereum Might have taken Permanent Lead Versus Bitcoin in 2020 in Terms of Economic Value Transferred on its Rails: Report

thought-catalog unsplash Bitcoin Ethereum CryptocurrencyBitcoin (BTC) has been trading sideways as some crypto analysts have warned that the digital asset’s price may become unpredictable in the short-term, according to a new report from OKCoin. The digital currency exchange confirmed that Bitcoin continues to gain institutional support.

BTC’s recent price action has been “relatively muted” when compared to the previous week, the report noted. It confirmed that last week Bitcoin recorded a new all-time high. The flagship cryptocurrency is now trading for around $18,300 at the time of writing (having dropped below the $19,000 mark). For the past couple weeks, Bitcoin has mostly been trading in the $18,000 and $19,500 range.

As mentioned in OKCoin’s crypto market report:

“This consolidation [of the Bitcoin price] has allowed certain altcoins (alternative coins besides BTC) to rally. For instance, Compound’s COMP has risen considerably in the past week. But large-cap assets like Bitcoin and Ethereum (ETH) have been relatively neutral to negative. Analysts are confident that the overall Bitcoin trajectory is one of growth. Case in point: institutional investors this past week continued to pledge their support for the leading cryptocurrency — and seems like Ray Dalio is on board as well.”

In a separate report, crypto research firm Messari points out that what’s different today from a few years ago is Bitcoin’s (BTC) “prominence in the macro conversation, and its emergence as a smart money alternative to gold.”

The extensive report from Messari notes:

  • Paul Tudor Jones has referred to Bitcoin as “the fastest horse”;
  • Stanley Druckenmiller has stated that “the bitcoin bet will probably work better” than gold;
  • Billionaire investor Chamath Palihapitiya recommends that “everyone should have 1% of their assets in bitcoin”;
  • Wall Street legend Bill Miller “strongly recommended” that investors gain exposure to BTC if they didn’t yet own the digital asset;
  • JPMorgan stated that family offices “may be looking at Bitcoin as an alternative to gold”;
  • Raoul Pal said that “Bitcoin is a supermassive black hole”;

Messari’s report also mentioned:

“Ethereum may have even taken a permanent lead this year versus Bitcoin in terms of economic value transferred on its rails. It’s hard to ignore five-year-old technologies that process more than $1 trillion in real value transfers per year, a figure that has already eclipsed PayPal’s. Ethereum has challenges ahead, but its dynamism is undeniable, and it will continue to be the platform to watch in 2021.”

As confirmed in another report from Coin Metrics, Ethereum (ETH) hash rate has reached a new-all-time high (on December 1, 2020). The ETH hash rate began its sharp rise this past summer, “spurred on by the rise of (decentralized finance) DeFi and subsequent rise in ETH transaction fees,” the report stated. It added that the DeFi mania appears to have “cooled off towards the end of September 2020, [and] there were some questions whether ETH’s hash rate would be able to continue its growth.”

Coin Metrics further noted:

“The launch of the beginning phases of Ethereum 2.0 and the eventual switch to Proof of Stake raises more questions about how Ethereum’s Proof of Work system will perform in the interim. Interestingly, ETH’s hash rate hit a new all-time high the day the ETH 2.0 beacon chain (the first step towards Proof of Stake) went live, and has remained near all-time highs in the days since.”

A recent digital asset fund flows report from CoinShares states that crypto-assets “shook off the wobble in prices two weeks ago with the second-largest investment product inflows on record totaling US$429m bringing total assets under management to a record US$15bn.”

The report added:

“Ethereum stood out this [past] week with inflows of US$87m representing 20% of total inflows, far greater than its current share of investment products at 14%. Gold has suffered with outflows from investment products of a record US$9.2bn over the last four weeks while Bitcoin saw inflows totaling US$1.4bn.”

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