Since its inception, bitcoin has been the most dominant cryptocurrency in the market. It has the largest market share, trading volumes, and capitalization. On the other hand, Vitalik Buterin's network is closely followed by Ethereum. With the launch of Ethereum 2.0, the balance of power in the network could change drastically.

Due to the rapid growth of the decentralized finance and applications sectors, the price of Ether reached new highs this year. With the help of experts, we discussed the various factors that could push Ethereum past Bitcoin and become the world's leading cryptocurrency.

Although Bitcoin's network is more prominent in various indicators such as trading volumes, transactions, and capitalization, the gap between it and Ethereum is gradually closing. For instance, in the spring, the miners of Ethereum earned more than those of Bitcoin. Also, the number of transactions processed by the blockchain of Ethereum occasionally overtakes that of Bitcoin.

On the day that Article 1 was released, Bitcoin was priced at almost $50,000 and its capitalization was around $83 billion. On the other hand, Ethereum was priced at around $3,108 and its cap is $359 billion. The difference in price and capitalization over time continues to decrease. For instance, in January 2017, the difference between Bitcoin and Ethereum was 23 times, and it decreased to 2.7 in January 2018.

The daily trading volume of Bitcoin is around $35.7 billion, while that of Ethereum is around $18.8 billion. However, since the beginning of the year, the number of transactions conducted by the network of Ethereum has increased significantly. On the other hand, Bitcoin's market share has decreased by 32%, while that of Ethereum has risen by 5.5%.

Bitcoin is considered as a digital asset that can be used for various purposes. It has a limited number of uses and is mainly used for peer-to-peer transactions. One of the main factors that makes it different from other cryptocurrencies is its usage of the Proof-of-Work consensus algorithm. This technology, which is known as PoW, is considered an outdated and unsuitable standard for money transfers. Due to its disadvantages, new projects are not likely to use this type of technology.

  • low speed and poor scalability - the maximum transaction speed in the Bitcoin network is 7-10 operations per second;
  • high commissions of miners;
  • high energy costs, mainly derived from the combustion of fossil fuels.

Ethereum is considered to be superior to Bitcoin due to its technological advantage. Its network can process up to 4,000 transactions per second, while Bitcoin checks blocks in around 10 minutes. In addition, due to its second-layer solutions, this network can perform 2,000 transactions per second. Although Ethereum 1.0 works on PoW, it is currently transitioning to a state 2.0 protocol. During this phase, the network will not perform mining, and it will only rely on PoS. This will allow it to increase its efficiency and speed. In addition, this technology will make it more environmentally friendly.

Although it is considered as a digital asset, Ethereum is more than just a cryptocurrency. It is a decentralized computing network that can be used to run various applications and smart contracts. It also has numerous use cases, such as financial and credit transactions, social networks, and blockchains that are built on its basis.

Why the price and use of ETH will only increase

The gap between ETH and BTC will decrease over time. There are several main reasons for this view. One of the main factors that contributes to the success of Ethereum is its development team, which has been working on the network for several years. During this time, it has continuously updated its technology and is constantly pushing the envelope in terms of its development. Unlike Bitcoin, which has not changed much over time, Ethereum is expected to continue to grow.

One of the main factors that contributed to the rise of Ethereum was the SegWit protocol's activation in 2017. This increased the block size. Despite Bitcoin's first mover advantage, it is believed that in the long run, Ethereum will surpass Bitcoin due to its technological advancements. According to a study conducted by the developers, the number of people working on projects related to Ethereum has increased significantly.

Prospects for Ethereum

According to Todd Morley, the former CEO of Guggenheim Partners, who recently spoke on Bloomberg TV, he believes that in the long run, Ethereum will surpass Bitcoin due to its technological advancements. It is also more likely to be used in real-world applications. For instance, it is believed that in the financial industry, it will allow investors to get more value than Bitcoin.

As the crypto market continues to grow, investors are starting to pay more attention to cryptocurrencies that are not just cheaper than Bitcoin, but also have long-term potential. For instance, since it is cheaper than Bitcoin, it is more likely that the price of Ethereum will increase. The next major spike in the price of Ethereum will be caused by the NFT and DeFi markets, which are expected to grow at an accelerated rate.

Due to the increasing number of blocked transactions in the DeFi and NFT markets, the total sales of these two cryptocurrencies have exceeded $217 billion. This has caused a huge increase in the demand for ETH, which is expected to lead to a price increase. Large investors are also starting to look into investing in the ecosystem as a whole.For example, the Grayscale Investments ETH trust, the world's largest digital asset manager, holds over $10 billion in assets.

In order to reduce its energy consumption, Ethereum is currently transitioning to a PoS protocol. This will allow it to reduce its energy usage by almost 99%. It is also expected that this factor will become more significant as more institutional investors start to look into investing in the ecosystem.

Due to the increasing number of prominent investors and financial professionals looking into investing in the Ethereum ecosystem, it is becoming more common for them to see the coin as an opportunity rather than a competitor to Bitcoin. Some experts believe that in the next couple of years, it will overtake Bitcoin in terms of both its capitalization and use cases.

Some of the prominent individuals who are currently looking into investing in the ecosystem include John Woo, the president of Ava Labs, Dan Morehead, the founder of Pantera Capital, Nathan Cox, the chief investment officer of Two Prime, and Mark Cuban, a billionaire investor. Charles Hoskinson, the founder of Cardano and the co-founder of Ethereum, is also a notable investor.

Although Ethereum is more advanced than Bitcoin, it does not directly compete with the latter. This does not mean that the first cryptocurrency will go extinct.

Despite the increasing number of investors looking into investing in the Ethereum ecosystem, it is not expected to have a significant impact on the market for the long-term. For instance, Bitcoin is the most dominant brand in the cryptocurrency market, and it would be like trying to take over the core of the Earth. Therefore, in the near future, BTC will retain its place as a leader among cryptocurrencies in terms of capitalization.