After a brief market correction last night, cryptocurrency markets continue to perform well, with Bitcoin’s price managing to return above the $23k levels, while Ethereum’s price is gaining dominance, surging past $1,600. With Ethereum’s market cap approaching $200 billion compared to Bitcoin’s $451 billion, ETH could soon reach 50% dominance compared to BTC, signaling a potential rally to $2k for ETH.
- Bitcoin returns to the $23k levels while Ethereum surges past $1.6k.
- ETH dominance is growing, trading volume surpassing half of Bitcoin’s.
- Ethereum could overtake Bitcoin in the next few months.
- Elon Musk still has eyes for cryptocurrency despite Tesla’s Q2 BTC selloff.
Could Ethereum Overtake Bitcoin Soon?
Ethereum is outperforming Bitcoin when it comes to the 24-hour and 7-day charts. In the past 24 hours, Ethereum’s price saw an increase of 8%, compared to Bitcoin’s 3%. In the past seven days, ETH gained over 34%, while BTC only registered a 13% gain.
What’s more, the trading volume for ETH surpassed half of Bitcoin’s, with a current 24-hour trading volume of $20 billion for Ethereum, compared to Bitcoin’s $35 billion.
The hype around ETH has to do with the “merge trade” as investors rush to buy the cryptocurrency in anticipation of the upcoming network merge in September, where Ethereum’s network will transition from a proof-of-work to a proof-of-stake consensus model, making the network not only much more sustainable from an environmental point of view, but enable ETH to process a significantly larger number of transactions per second.
At EthCC, Vitalik took the stage on Thursday to explain in detail how the network merge will affect Ethereum, specifying that ETH will be able to handle upwards of 100k transactions per second, quite an upgrade from the current max TPS of the network of 108.
While Bitcoin continues to work on a legacy proof-of-work model, Ethereum’s forward-looking network transition could provide the fuel to overtake Bitcoin for the first time in history.
Ethereum has been pushing the frontiers of crypto markets for many years, with the introduction of smart contracts, supporting NFTs, DeFi, Web3, and other trends in crypto. Without Ethereum, we wouldn’t have decentralized exchanges, liquidity pools, yield farming, DeFi 2.0, and many other services which provide substantial utility for the crypto community. As such, it makes sense for Ethereum to finally overtake BTC in terms of market capitalization.
For ETH to overtake BTC, its price needs to surpass 15% of Bitcoin. For example, if Bitcoin trades at $25k, Ethereum will have to trade above $3,750. This means ETH needs to double in price while Bitcoin remains relatively flat for the “flippening” to occur. While it may seem unlikely in the short term, over the span of several months, such market action could occur.
The big news circulating Bitcoin is Tesla’s selloff of over 75% of its cryptocurrency, as revealed in its Q2 2022 earnings report. After investing over $1 billion in crypto assets in 2021, it’s surprising to see Tesla sell most of its Bitcoin holdings at a loss, valued at over $300 million.
Some speculate that Tesla’s selling of its crypto assets could be a “wash trade.” This means the company uses its cryptocurrency losses to offset capital gains in its other investments. A valid strategy that reduces the tax liability for an entity.
With his latest Tweet about Dogecoin’s core update, Elon Musk still seems to be interested in cryptocurrency.
— Elon Musk (@elonmusk) July 21, 2022
Regardless of the reason for Tesla’s crypto selloff, Bitcoin is still performing relatively well, managing to rise back above the $23k support level.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any service.
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