The price of the numero uno digital token by market cap has once again hit the $50,000 mark, delivering more than 70 per cent returns from its recent lows of $29,000. Ethereum has risen about 80 per cent to $3,300 from $1,850.
This strong tussle between the two has again started off a debate among investors over which one is more valuable. Despite a sharp rise in altcoins, the fancy over crypto behemoths has not fizzled out completely.
Sharan Nair, Chief Business Officer of CoinSwitch Kuber, said Ethereum has seen a surge in pricing due to a lot of DeFi projects going on around it. However, analysts said the recent update has limited the supply of Ethereum, which led to the sharp movement in the token. But it can not dethrone Bitcoin.
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.
Ethereum is now getting a scarcity premium as the London Hard Fork update has led to deflation. On the contrary, the oldest cryptocurrency, Bitcoin, has limited supply; not more than 21 million Bitcoins can be mined.
“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.
Menon of Wazir X did not give any personal advice.
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,” he added.
Nair of CoinSwitch Kuber said: “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.”