- The London hard Fork update has led to a rally in Ethereum, helping the digital token outperform the biggest cryptocurrency.
- Analysts say the recent update has limited the supply of Ethereum, which led to the sharp movement in the token.
- Bitcoin is limited in supply; not more than 21 million Bitcoins can be mined.
New Delhi: Bitcoin recently crossed the $50,000 mark, delivering over 70% return from its recent low of $29,000. Despite this rally, the numero uno digital token by market cap has underperformed Ethereum, the second largest cryptocurrency, which has risen about 80% to $3,300 during the same period. The London hard Fork update has led to a rally in Ethereum, helping the digital token outperform the biggest cryptocurrency.
Given the current scenario, will Ethereum be able to outperform crypto behemoths in the long run?
Analysts say the recent update has limited the supply of Ethereum, which led to the sharp movement in the token. But it can not dethrone Bitcoin. “Ethereum has seen a surge in pricing due to a lot of DeFi projects going on around it,” the Economic Times quoted as saying Sharan Nair, Chief Business Officer of CoinSwitch Kuber.
Siddharth Menon, COO of WazirX, said Ethereum may outperform Bitcoin in returns but not in market cap. “Bitcoin will still hold the largest share and will remain dominant,” he added.
Worth mentioning here is that Bitcoin is limited in supply; not more than 21 million Bitcoins can be mined. So demand for the oldest cryptocurrency will remain robust in the future.
“Ethereum doesn’t have an explicit supply cap. But if a shortage happens, I am hoping that we will see a surge in pricing. It is the basic demand and supply rule,” said Nair.
Supply shock has been aiding the upward movement in Bitcoin historically, and that may now push Ethereum prices higher. However, analysts can not pick one over the other, thanks to strong fundamentals, well-defined useage and outperformance over the years. They are bullish on both the tokens. “This is a positive market recovery and also crypto market cap has broken $2.1 trillion. This should show a positive signal to the rest of the market,” the ET report quoted him as saying.
Nair of CoinSwitch Kuber told the publication: “While Bitcoin has been in the game longer and has gained widespread recognition, Ethereum offers more opportunities to grow over time. Both have different use cases.”