The price of Bitcoin enjoyed a rise on Monday, surging by 10 percent having endured a big slump after reaching an all-time high just a couple of weeks ago. It saw $15,000 (£10,800) knocked off its value, and fell below $50,000 (£35,000) for the first time since March. It is currently trading at £39,000, a slight uptick from where it has been this week. This comes as many fear the US Government could hit Bitcoin with regulations due to environmental concerns.
One expert believes that attention will soon turn to another crypto asset – Ethereum.
Ethereum has bucked trends in recent weeks, hitting a record high last week thanks to a “perfect storm”.
It reached each above $2,600 (£1,873) on Thursday – the first time in its history – after trading below $200 (£144) only a year ago.
One expert claimed this week that Ethereum has more potential than the more established Bitcoin, and could even surpass it in value in the next few years.
eToro analyst Simon Peters told Crypto AM: “Ethereum could certainly challenge Bitcoin for the number one spot among cryptoassets in terms of market cap, but it will be a few years yet before this could potentially happen.
“We must remember both tokens were created for different reasons. Bitcoin is a decentralised currency and Ethereum is a platform to build decentralised apps that make use of smart contracts.”
He added that Ethereum’s value looks set to rise at a quicker pace than rival crypto assets, and that it has more potential for use in the “real-world” than Bitcoin.
Mr Peters added: “At this moment in time, Ethereum arguably has more potential for more real-world applications, prompting a wider ecosystem than Bitcoin.
“Currently, plenty of DeFi applications are being built such as Uniswap, MakerDAO and Chainlink to name a few, as well as supporting smart contracts and NFTs.
“Granted, some of Ethereum’s success can be attributed to Bitcoin and the interest in crypto assets it has created.
“With far more activity and increasing numbers of users projected for Ethereum, thanks to the number of applications being built on it, I expect it will cause the overall network value to increase, and, in turn, the price of Ether could increase at a quicker pace.”
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Mr Peters also explained that Bitcoin has had a six-year head start on Ethereum, with the latter sitting at an astounding value of tokens mined.
He added: “If you look at where the market cap of Bitcoin was six years ago it was approximately $5billion (£3.6billion), whereas Ethereum at a similar point in terms of its life cycle (six years since launching) has a market cap of $300billion. (£216billion).
“While the two have traded in tandem for much of the last three years, as the crypto asset market starts to mature, investors will be looking across the broader spectrum of assets and assessing which has the best long-term potential.
“Bitcoin has captured the attention of millions of investors, but Ethereum offers an alternative. With Ether’s dollar valuation significantly lower than Bitcoin, it also appeals to investors who want to own whole coins, something which is now far more expensive to achieve with Bitcoin.
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“With the widespread usage of Ethereum’s network following its latest upgrade, the crypto asset continues to offer a lot of opportunities to developers and investors.”
Britain’s Financial Conduct Authority (FCA) warned investors of the risks that come with Bitcoin following the recent slump.
They said: “If consumers invest, they should be prepared to lose all their money.
“Some investments advertising high returns from crypto assets may not be subject to regulation beyond anti-money laundering.
“Significant price volatility, combined with the difficulties valuing [Bitcoin] reliably, place consumers at a high risk of losses.”
Express.co.uk does not give financial advice. The journalists who worked on this article do not own Bitcoin.
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