Ethereum could pave the way for $ 100,000 in Bitcoin, claims Bloomberg analyst
Ether (ETH) has outperformed Bitcoin (BTC) year-to-date by over 320% versus BTC’s return of 54%. However, Bitcoin will quickly meet up with ether’s momentum and presumably even improve its unit price to $ 100,000, in response to senior commodity strategist at Bloomberg Intelligence Mike McGlone.
“If Bitcoin catches up with Ethereum’s performance this year, the price of the No. 1 cryptocurrency will reach $ 100,000,” the analyst mentioned. tweeted on August ninth when the BTC price exceeded $ 46,000.
While McGlone did not concentrate on the components that could examine Bitcoin to Ethereum’s earlier beneficial properties, his earlier cryptocurrency report cited a number of catalysts that could drive cryptocurrency costs increased. Notes on the report:
“In round 80% of Bitcoin and Ethereum, a big a part of the efficiency of the Bloomberg Galaxy Crypto Index (BGCI) comes from the broader consciousness of the first crypto foreign money as international digital reserve property and the acceleration of fintech digitization and the financial system. “
Trillions of dollars are waiting on the sidelines
Bitcoin proponents believe it can compete with the US dollar as a global reserve asset. One big reason is the cryptocurrency’s firm limit on supply, which makes it better than the greenback for proponents (the Federal Reserve only printed $ 3.1 trillion in 2020).
As a result, Bitcoin closed 260% higher last year, reflecting that investors see it as a hedge against the inflation caused by the dollar.
In its survey in early 2021, Goldman Sachs also identified a backlog of institutional investors for Bitcoin, including pension funds, global sovereign wealth funds, and mutual funds. But even if they have trillions of dollars in reserves, the lack of clear regulations governing cryptocurrencies has made it impossible for accredited investors to invest those funds in the Bitcoin market.
Analysts at Autonomous Capital Management claim that a managed, exchange-traded Bitcoin fund will accelerate the adoption of Bitcoin by institutions. Additionally, they stated that while Bitcoin is viewed as a very volatile asset class by investors, its lack of correlation with traditional risk factors would be like music to their ears.
The Autonomous analysts added:
“If we assume that Bitcoin at present has the similar weight as gold in an investor’s portfolio, its price can be 2.8 occasions increased, or about $ 112,000.”
Despite the prospect of being rolled out on Wall Street, Bitcoin’s dominance has collapsed after peaking at around 73% in December 2020.
Ethereum, in particular, has become the biggest benefactor of the falling Bitcoin Dominance Index. The company’s own dominance in the crypto industry has increased from 10.06% in December 2020 to 20.05% at the time of writing.
Part of the reasons for Ether’s growing dominance is due to the explosion of non-fungible tokens (NFTs), which are digital files whose originality and scarcity can be authenticated by the public ledger.
In addition, the boom in decentralized finance, including lending, borrowing, and other financial services built on top of the Ethereum blockchain, has fueled the adoption of Ether by the masses.
Ethereum developers are also taking steps to scale the blockchain. On August 5th, Ethereum in London updated its software with a so-called hard fork with the aim of becoming an official proof-of-stake protocol in the future.
The update also increases deflationary pressures on supply as the proposed EIP-1559 enhancement offers a fee-cutting feature. On the first day alone, EIP-1559 enabled the elimination of $ 2 million worth of ether tokens.
As of Monday, the feature burned about $ 5.5 million worth of ETH, according to data from Ultrasound Money website.
Related: Vitalik: “More assured about consolidation” after profitable Ethereum improve in London
McGlone famous that Ethereum’s efficiency up to now suggests it could overtake Bitcoin in phrases of market cap in 2022 or 2023. However, the analyst is sticking to its price goal of $ 100,000 for Bitcoin.
“As we see Bitcoin down this path, there appears to be little that may cease the transformation of Ethereum,” he said.
So far, Ethereum has outperformed Bitcoin in terms of network transactions and total transaction fees, data from the Blockchain Center shows.