The recent decline in Bitcoin price has put the spotlight back on the second biggest cryptocurrency, Ethereum, which, according to some, has the potential to replace it as the number one digital currency in market share, Business Today reported on Tuesday.
Bitcoin has seen a major fluctuation in price in the past couple of months. It rose to the all-time high of $65,000, only to fall 50 per cent to $30,000. Its market share also went down to 42 per cent ($1.6 trillion) from 70 per cent before the start of 2020, CoinGecko data shows.
The month of May saw the biggest fall in Bitcoin price, thanks to the tightening of cryptocurrency laws by China and Tesla chief executive Elon Musk changing his stance on Bitcoin.
When compared to the market share, Bitcoin is still way ahead compared to Ethereum. The May rout helped Ethereum narrow this gap by about $350 billion. While Ether dropped by around 11 per cent in May, Bitcoin suffered a way worse route at 37 per cent. On year-on-year growth too, Ethereum seems to be beating Bitcoin. While Ethereum grew over 900 per cent over the past year, Bitcoin saw a 275 per cent jump, the report added.
Ethereum investors and its fans say there are two big reasons for a strong momentum — popularity for blockchain-based financial services and digital collectables and a major upgrade in its technology, which is underway and will bring a tectonic shift in the way Ethereum works.
Experts say Bitcoin will eventually lose its title as the number one crypto as another digital currency with better technology and tech agility will become more popular among crypto investors, and Ethereum seems to be offering just that.
“(Ethereum) will likely exceed Bitcoin at some point in the future, as Ethereum will be superior when it comes to innovation and developer interest,” said Tegan Kline, co-founder of blockchain software company Edge & Node, reported Bloomberg. Some also believe that replacing Bitcoin won’t be an easy game for Ethereum as it still has many advantages over Ethereum. “Bitcoin will still remain king of the cryptos,” Edward Moya, senior market analyst at Oanda Corp told the news platform.
Ethereum is also working on a major shift that will help save up to 99.5 per cent of the energy it currently consumes. Given the stiff opposition cryptos like Bitcoin are facing over climate change issues, it’s possible that more investors get drawn towards Ethereum in future.
Ethereum already uses lower energy than the most popular cryptocurrency Bitcoin. It will soon be completing the transition to Proof-of-Stake (PoS) from the Proof-of-Work (PoW) system, according to Carl Beekhuizen, an Ethereum Foundation researcher. The technological shift will mean Ethereum will consume even less energy than Bitcoin.