Crypto Price Prediction: Bitcoin Could Lose Its Crown To Ethereum By 2022 Even After Sudden Surge Toward $70,000
Bitcoin's price has suddenly rocketed higher this week, surging to a fresh all-time high of around $68,000 per bitcoin—following predictions of a "big week."
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The bitcoin price rally comes after ethereum, the second-largest cryptocurrency, soared to never-before-seen highs last week. The ethereum price has added 35% over the last month, compared to bitcoin's 25% rise.
Now, as traders and investors cheer the combined crypto market topping $3 trillion for the first time, one hedge fund manager has made the prediction ethereum could overtake bitcoin as the most valuable cryptocurrency as soon as 2022.
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"I definitely think there's a really good chance for ether to surpass bitcoin. I wouldn't be surprised if it happened within the cycle," Rahul Rai, the co-head of market neutral at BlockTower Capital, told Insider. "Very tough to predict when this cycle will end. My take is mid-next year."
The ethereum price has leaped over the last year amid a surge of interest in blockchain-based decentralized finance (DeFi) and non-fungible tokens (NFTs)—both largely build on top of ethereum's network.
Many in the crypto community have previously predicted ethereum could eventually overtake bitcoin as the most valuable cryptocurrency, with DeFi—the idea that traditional financial services could be replaced by blockchain-based protocols—and NFTs—using crypto technology to tokenize all manner of digital media and assets—helping to drive ethereum adoption and, in turn, the price of its ether tokens.
"Ethereum is trying to power the rails of all of global finance in the future, and that is a much bigger market, if it does succeed," Rai said. "If it does succeed, and if the thesis plays out, then the market value is going to capture trillions of dollars in global activity, and that's a much bigger market than (what) bitcoin's going up (toward)."
Rai is, however, still bullish on the bitcoin price, echoing others who have said bitcoin could replace gold as the world's de facto store of value and hedge against inflation.
"Bitcoin is a store of value, it's digital gold," said Rai. "And so its market cap, at most, is going to be somewhere around gold—maybe larger, because it has some properties that are better than gold. But that's roughly the benchmark you're going to use to cap its market size."
The market capitalization of gold is currently put at around $11.6 trillion, with bitcoin at $1.3 trillion and ethereum at just $570 billion.
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As well demand for ethereum soaring in recent months, the supply of ether tokens has also been put under pressure. A long-awaited ethereum upgrade, deployed over the summer, has meant many ether tokens are being "burned" instead of coming onto the market but data shows investors are also looking to hold for longer.
"Demand for ethereum has been grown at the same time creation of new coins has slowed," David Russell, vice president of market intelligence at TradeStation Group, said in emailed comments, pointing to data from Cryptoquant that shows just 18 million ethereum are now available to the public as large investors have removed ethereum from exchanges in order to hold them safely. "That’s the least in over a year, and a drop of about 16% since late June."Source