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Ethereum

The Rise And Rise Of Ethereum: How Likely Is A Bitcoin Flippening?

Ethereum has risen over 32% this week, from the week’s starting price of $ 213 (Feb 06) to trading at $ 282, at the time of this writing. This big rise can be attributed to various factors: ongoing progress towards Ethereum 2.0, Ethereum fast cementing its position as leader in Decentralized Finance (DeFi), plenty of Ethereum related conferences and other activities happening in the near future, the Non Fungible Token (NFT) angle and prominent interest from institutional groups. So, how likely is the Bitcoin Flippening? Let’s examine each of these causes for the recent rise and the potential game-changers in the future separately.

Ongoing Progress Towards Ethereum 2.0

Ethereum team published a major update on the progress towards Ethereum 2.0 and announced that they are closer to reaching the Phase 0 of the Ethereum 2.0 – which is expected to go fully functional around 2022. Some of the improvements announced were the completion of audit and formal verification of the Eth2 deposit contract (further review has been requested from the developers though), Beacon chain – the core component of Eth2, responsible for sharding is being optimized, Lighthouse testnet issues have been patched by Sigma Prime team, Prysmatic testnet passed 180k slots and has over 35k active validators, Alethio’s new Eth2 node monitor has been released helpful in combining statistics, Whiteblock released libp2p gossipsub testing results and release of OpenZeppelin Contracts v2.5. However, the update noted that the design for Ethereum 2.0 hasn’t been finalized yet and a more clear picture will emerge in the future, after the research and testing has been completed.

Ethereum – The Undisputed Leader Of Decentralized Finance (DeFi)

Ethereum is fast cementing its position as the undisputed leader of Decentralized Finance (DeFi). The next revolution in cryptocurrency arena, DeFi crossed $ 1.2B mark recently and is well on its way to setting new record highs. As per Defi Pulse, 3.1M ETH (3,100,000) are currently locked on the platform, reducing the supply and creating new demand/use case for Ethereum tokens. Considering Ethereum’s total supply until now is ~ 109.6 M and increasing, its certainly a thing to watch out for and take into consideration. With interest in DeFi rising and major developments in that field happening on the Ethereum blockchain, the price value of Ethereum tokens can go very high, when decentralized finance starts competing with current financial services.

Lots Of Activities In Ethereum Camp

Ethereum has a lot of activities planned in the near future, different conferences, hackathons, Eth2 bounties etc are coming. This is resulting in improved developer interest in the blockchain, paving the way for further improvements and optimizations. Some of the major events are mentioned below:

1. ETHDenver – Denver, USA, Feb 14 to Feb 16 (bounties coming for Eth2)

2. Stanford Blockchain Conference – Stanford, USA, Feb 19 to Feb 21

3. Eth222 – Stanford, USA – Feb 22

4. ETHLondonUK – London, UK – Feb 28 to Mar 1

5. Ethere al Summit – New York, USA – May 8 to May 9

The Non Fungible Tokens (NFTs) Angle For Ethereum

Non Fungible Tokens (NFTs) are also likely going to drive Ethereum prices in a major way, alongside DeFi. The leading NFTs developers are working on the Ethereum blockchain, aided by the specially defined separate standard for minting NFT tokens – ERC-1155. The standard allows for the creation of countless tokens, using a single smart contract. It also allows multiple tokens or digital assets, to be transacted, in a single transaction, saving fees and resources. NFTs can also be programmed to act in a certain manner, using ERC-1155.

Enjin Coin (ENJ) and Chiliz (CHZ) are the leading developers of Non Fungible Tokens (NFTs) on the Ethereum blockchain. A transfer of digital assets to the blockchain is desirable due to its inherent features of tampering resistance, ability for easy transfers (and transfer across multiple games), proper sole ownership and authentication, keeping secure records and provision of programming features to the assets. Considering massive consumer spending on digital game assets and the high likelihood that this market is going to transfer on the blockchain, we can imagine a future where Ethereum forms the main cornerstone of Non Fungible Tokens (NFTs). In such a scenario, the demand for Ethereum (ETH) would rise significantly, because the value of these assets, in a way, would be backed by Eth tokens.

Institutional Interest On The Rise

It is apparent from the news coming out that Ethereum is a major recipient of the institutional interest. Recently, JPMorgan signaled plans to merge its blockchain unit Quorum with Ethereum’s ConsenSys. It is expected to happen in six months. Also, the Commodity Futures Trading Commission (CFTC) chairman Heath Tarbert said that the commission is evaluating if Ethereum would still remain a commodity after the future upgrades. If its found to be such, in Mr Tarbert’s view, it could support a futures market. Sustained institutional interest and development in these directions, can send Ethereum prices flying, from the current value.

Can Ethereum Overtake Bitcoin?

While certainly a daunting task, its not exactly possible to overrule it completely. Bitcoin’s current market capitalization is close to 187B, Ethereum on the other hand can manage only around 31B. However, its use cases and adoption potential are both growing, with Decentralized Finance (DeFi) and Non Fungible Tokens (NFTs) leading the pack. Ethereum transition to the next iteration of it – Eth2 will certainly ensure better security, processing times, less fees and more efficient resource usage. Bitcoin in contrast refuses to evolve, because of the difficulty in forming community consensus plus its focus on originality. Ethereum is fast improving its programming potential, moving towards a new major upgrade, cementing its position in both DeFi and NFTs and gathering institutional interest. Though, not happening anytime soon, its “very likely” in the far future to overtake Bitcoin in terms of market capitalization with its newfound utility, adoption and better technology.

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