The token of the second largest cryptocurrency in the world, Ether (ETH), could surpass Bitcoin and go to new highs in its history.
In a tweet, Ki Young Ju, CEO of on-chain analytics service CryptoQuant, highlighted a “sell-side liquidity crisis,” which could still give ETH an edge over BTC.
The so-called “liquidity crisis” means that there is a shortage, in this case, of Ethereum, which means that there is more demand than supply; This can cause a sharp rise in the price of the cryptocurrency.
With Bitcoin rising more than 50% compared to its lows of $ 29,000 per unit, the other cryptocurrencies, called “altcoins,” have also started to wake up.; In this context, Ether is one of the most important, being the largest altcoin, which is why it has once again managed to reach $ 3,000 per unit. And now it is considered by experts as a “barrier” from which the price hardly falls.
Even though the focus is on Bitcoin rebounding to $ 50k, Investors are betting heavily on Ether, due to the new update called the London Hard Fork, or EIP-1559, which registered the network earlier this month. One of the novelties that this update brought was the burning of tokens, which causes even more scarcity of cryptocurrencies, and increases the price to a greater extent. Thanks in part to supply shifts driven through the hard fork, a liquidity shortfall could finally serve to push ETH to new all-time highs before BTC manages to do the same.
Ki, explained how this could happen, and why it should happen: “ETH could hit its all-time high before long-term BTC. The current price of ETH is closer to its all-time high, compared to BTC. Higher demand, lower supply. The liquidity crisis on the selling side of ETH is still intensifying, while BTC’s exchange reserve halted its downward trend in May. “
In addition, Ethereum’s popularity is growing out of Bitcoin’s. For example, the “Report on the State of Cryptocurrencies in Singapore 2021”, conducted by the cryptocurrency exchange Gemini in association with CoinMarketCap and Seedly, found that more than two-thirds of Singaporeans who have financial investments currently own cryptocurrencies. And when it comes to the distribution of crypto assets, the focus of Singapore investors is Ether, it has a clear advantage with 78 percent as the most popular cryptocurrency, while 69 percent of cryptocurrency holders they own Bitcoin.
Ki is not the only expert betting on Ethereum in a more rampant bull run compared to Bitcoin. Bloomberg Intelligence has also come out in favor of ETH over BTC in a recent report, even forecasting a “sea change” for the largest cryptocurrency.
In favor of Bitcoin, the data shows a reduction in the offer of Bitcoin, that is, there are fewer investors interested in selling the cryptocurrency, which throughout the history of BTC, has represented a rise in the price.
Yanina Orrego, CEO of Capital Ediciones, believes that it is difficult to compare ETH and BTC, but does not see very likely that Ethereum will become the number one cryptocurrency. In connection with this, he told Infobae: “Bitcoin is the first cryptocurrency to be developed, which means that it is the one with the least technology, and is known as 1.0, while Ethereum is 2.0 and has more technology behind it ”, and added: “Even so, they are different cryptocurrencies, each one solves a different problem, and that is why it is difficult to compare them.”