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Will Ethereum surpass Bitcoin?

Photo of: Joseph Stone
by Joseph Stone

When will it happen? Ryan Watkins of Messari doesn’t know. But the analyst believes that once Ethereum 2.0 is up and running, Ether could steal Bitcoin’s spot as the world’s leading cryptocurrency.

The hierarchy of cryptocurrencies is not set in stone. However, Bitcoin has held the top spot in terms of market capitalization since its inception. This position is not a foregone conclusion and Ether has the assets to rise to the top.

At least that’s the position put forward by Ryan Watkins, a senior analyst at crypto firm Messari. According to him, ETH only needs one thing to supplant BTC: the finalization of version 2 of the Ethereum blockchain.

Watkins remains cautious, however. “Bitcoin’s selling point over Ethereum as a store-of-value asset comes down to its very predictable monetary policy and Bitcoin’s very secure blockchain,” the analyst considers.

Ryan Watkins expresses this sentiment on the YouTube show FinTech Today. So, he adds, these strengths may not be enough for Bitcoin to differentiate itself over the long term and maintain a competitive advantage.

“I think with the move to Eth2 and proof-of-stake, (…) Ethereum can actually potentially be more secure than Bitcoin,” so judges the Messari expert. As for the value of ETH, it will not necessarily follow the current trend of BTC. On the contrary, in fact.

“Ethereum’s monetary policy will actually change with Eth2. So it will not only be less inflationary than Bitcoin, but actually deflationary. So every year there will be less and less Ether in circulation because it’s being burned,” he argues.

And it’s the combination of these two characteristics, deflationary and more secure, that could eventually allow Ethereum to take over Bitcoin. That’s not the only advantage of Ether. The blockchain has much richer uses.

The development of decentralized applications on Ethereum favors the growth of its users and its adoption. Thus, the economy developed on Ethereum is both “massive” and “diverse”. Bitcoin can’t say the same.

“At some point, the Ethereum economy is starting to attract so much capital, both human capital and financial capital, that it’s actually a force in the global economy,” judges Ryan Watkins.

And other crypto players are making a comparable analysis, like Prakash Chand of FD7 Ventures. The latter says he is “willing to bet that each of Ethereum, Cardano and Polkadot will be more valuable than Bitcoin in the next few years. “

These crypto projects would indeed offer far greater utility. “Projects like Cardano, Polkadot and Ethereum are the foundation of the new Internet and Web 3.0,” says Prakash Chand.