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Forget Bitcoin, One Market Forecaster Says This Cryptocurrency Looks Poised For Bigger Gains

Forget Bitcoin, One Market Forecaster Says This Cryptocurrency Looks Poised For Bigger Gains

This crypto could one day overtake Bitcoin as the world’s largest digital coin. Here’s why.

It has been a wild year for Bitcoin.

The world’s largest cryptocurrency spent the first few months of 2021 surging higher, hitting new records seemingly on the daily.

After jumping to a new record high of $64,829 on April 15, Bitcoin has fallen more than 40% and sits at $38,811 at the time of writing. The precipitous fall has even prompted some analysts to question if the bull market in Bitcoin has come to an end.

Still, massive declines in Bitcoin historically have eventually led to even bigger swings higher.

But for investors who can cope the wild rallies and nauseating falls in Bitcoin, there’s another cryptocurrency that may be a better bet for the long term.

“Some of these coins like Ethereum are going to be a lot higher way down the road,” said Bianco Research president Jim Bianco. “But you’re going to have to stomach through much more of what we saw in the last week coming in the next several months or year or so.”

The May rout didn’t just hit Bitcoin. Multiple other cryptos took massive hits last month, but Ethereum proved to be relatively resilient and some are speculating that the world’s second largest digital coin could one day overtake Bitcoin by market value.

Right now, Bitcoin is more than twice as big as Ether, with the former having a market cap of more than $726 billion and the latter worth around $326 billion. However, the gap between them narrowed by about $350 billion in May as Ether took a smaller hit than Bitcoin.

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.

Speaking of innovation, what took Bitcoin down last month is one of Ethereum’s biggest selling points.

Tesla CEO Elon Musk announced on May 13 that the electric vehicle maker had “suspended vehicle purchases using Bitcoin” out of concern over “rapidly increasing use of fossil fuels for Bitcoin mining and transactions.”

The about-face by one of the crypto market’s loudest proponents caught investors off-guard, and the subsequent tumble in Bitcoin’s price wiped billions of dollars off the digital coin.

“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment,” Musk tweeted at the time. “Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy.”

But while Bitcoin mining and transactions are using up massive amounts of energy, Ethereum developers are closing in on a long-sought fix to cut the coin’s energy use by over 99%.

Developers have for years been working to transition the blockchain from a proof-of-work system—which both Ethereum and Bitcoin operate on now—to a proof-of-stake system which uses a totally different approach to secure the network while also eliminating carbon emissions. 

“Switching to proof-of-stake has become more urgent for us because of how crypto and Ethereum have grown over the last year,” said Ethereum inventor Vitalik Buterin, who added that he’s hoping to have the switch-over by year end. “I’m definitely very happy that one of the biggest problems of blockchain will go away when proof-of-stake is complete. It’s amazing.”

The change over could boost the price of Ether as investors who are environmentally conscious switch over to the coin for its smaller carbon footprint. 

“It’s hard to ignore that the ESG narrative is going to be big,” Messari analyst Wilson Withiam said. “If you’re looking at Ether as an investment, it doesn’t have that looming over it.”

Dan Morehead, founder of Pantera, said in a recent note, “Ethereum has a massive ecosystem of decentralized finance use cases with rapidly growing adoption. Combine these two dynamics and we thing Ethereum will keep gaining market share relative to Bitcoin.”

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