Ethereum Could Soon Take Half of Bitcoin's Market Cap, Tech Analyst Claims

Francisco Memoria
  • A tech analyst has recently argued ETH's market cap will surpass that of BTC in the next five years.
  • This as he claims it offers much more than the flagship cryptocurrency.

Ian McLeod, a tech analyst working for Thomas Crown Art, an art agency that uses the Ethereum blockchain to protect the industry it’s in, has recently argued ETH could take half of bitcoin’s market cap within five years.

Speaking to MarketWatch, McLeod argued the second-largest cryptocurrency by market cap has recently found a bottom after its price plummeted, and that its price will reflect the growth of the utility of its blockchain.

He was quoted as saying:

Not only do we think it will rebound considerably before the end of 2018, I believe that over the longer time it will significantly dent bitcoin’s dominance. In fact, I think we can expect bitcoin to lose 50 percent of its cryptocurrency market share to ethereum, its nearest rival, within five years.

Bitcoin, the flagship cryptocurrency, is currently trading at $6,300 and its market cap is of $110 billion, over five times that of ETH, which is currently of $21.3 billion. Taking half of bitcoin’s market share would mean ETH could become the number one cryptocurrency – an event market watchers dubbed “the flippening.”

Ethereum’s ether is, at press time, trading at $209.7 after falling nearly 1% in the last 24-hour period. In the last 30 days, the cryptocurrency plummeted from about $300 to a low of $170, before recovering, according to CryptoCompare data.

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Ethereum has notably been able to recover at a time in which the number of people betting against it keeps rising. McLeod, citing the utility of ETH for his firm, claimed the cryptocurrency offers much more than BTC, as it allowed Thomas Crown Art to “create a system to use artworks as a literal store of value.”

Per his words, it also solved authenticity and provenance issues, as all of the firm’s works are “logged on the Ethereum blockchain with ‘unique smART contract.” Unless BTC faces its scalability issues, he said, the next five years will see ETH surge.

As MarketWatch points out, ETH is no stranger to scalability issues itself. While its network can process more transactions per second than that of bitcoin, the difference can seem minimal to users dealing with high fees and slow processing times.

The Ethereum network is set to scale thanks to major updates, which include Sharding, Plasma, and its long-awaited transition to a Proof-of-Stake (PoS) consensus algorithm. Defending the cryptocurrency and its network, McLeod added that ETH is “already light years ahead of bitcoin in everything but price.”

Notably rating agency Weiss Ratings tweeted out in agreement.

ETH-based decentralized exchanges (DEXs) are also set to scale. As CryptoGlobe covered Ethfinex has recently launched ‘ETHfinex Trustless’, a non-custodial exchange in which users won’t have to sign up to trade in. The exchange is reportedly sharing Bitfinex’s order books.

Bitcoin’s Price Surges Nearly 10% to Surpass $8,000 as Crypto Market Adds $20 Billion

The price of bitcoin, the flagship cryptocurrency, has recently surpassed the $8,000 mark in a move some believe is extremely bullish and could help it go up to $20,000. What’s behind the rise is unclear, although a counter trading indicator pointed towards it.

At press time, BTC is trading at $8,055 after rising 10% in the last 24-hour period, according to CryptoCompare data. The flagship cryptocurrency’s market cap is now of $142 billion, and its recovery came merely days after it had a $1,000 ‘flash crash’ caused by a 5,000 BTC sell order.

Bitcoin's price performance in the last 24-hour period

It’s currently unclear what’s behind the cryptocurrency’s rise, although some have pointed out tensions between the United States and China may be helping, as bitcoinj’s price has been moving up when trading volumes are higher on Asian exchanges.

The U.S. recently hiked tariffs on $200 billion worth of Chinese goods, with China retaliating with higher levies on billions of dollars worth of U.S. products. These developments severely affected the stock market, and could be seeing investors hedge with bitcoin and other cryptocurrencies.

Notably, some could have predicted BTC would surpass the $8,000 mark this weekend as CNBC’s Fast Money Twitter account recently posted a bearish tweet showing a head and shoulders pattern, which implied a drop was imminent.

In the cryptocurrency space CNBC’s tweets are seen as a counter trading indicator, as often bitcoin does the exact opposite of what the financial news outlet’s social media accounts predict will happen.

The cryptocurrency’s price rise also comes as search interest for it hits a 14-month high, according to Google Trends data. This means that search interest for BTC hasn’t been this high since February of last year, when it was trading between $8,000 and $11,000.

Mati Greenspan, a senior market analyst at eToro, has noted the cryptocurrency’s price performance is bullish, and that there could be “virtually no major levels of resistance until $20,000.”

Recently, the co-founder and CEO of digital asset exchange Gemini, Tyler Winklevoss, called bitcoin “gold 2.0.” Facebook has also shown it’s getting more serious about blockchain, cryptocurrencies, and payments, which could be heightening interest in the space.

Bob Iaccino, an experience fun manager and veteran trader, has earlier this week argued that the growth of BTC’s layer-two scaling solution, the Lightning Network (LN), could also be supporting the cryptocurrency’s rally.

Altcoins Follow Bitcoin’s Rally

Available data shows that most altcoins have followed the flagship cryptocurrency’s rally, with most being up well over 3% in the last 24-hour period. Top altcoins like Ethereum’s ether, litecoin, XRP, and Zcash are all up by over 7%, with ether rising nearly 10% to trade at $258.

Interestingly Bitcoin Cash, a cryptocurrency that has recently seen a hacker take advantage of an upgrade to get miners to mine empty blocks and that has seen a mining pool have over 51% of its hashrate for a brief period, has risen over 16% in the same period. BCH is currently trading at $415.

Dash and Cosmos are other cryptocurrencies that have risen over 10% in said period. Overall the rally has seen the crypto market add over $20 billion.