Bitcoin Could Boom 430% but Ethereum May Still Steal its Thunder

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Bitcoin believers may have new reason to rejoice following the stimulus checks, but Ethereum has use cases on its side.

U.S. President Joe Biden’s $1.9 trillion COVID Relief Bill has passed congress and stimulus checks are soon to be distributed. Early signs indicate recipients are ready to buy Bitcoin.

A survey by Mizuho Securities showed that out of 235 participants who expect to receive stimulus checks from the COVID Relief Bill, 10% are interested in investing in Bitcoin. It’s a small sample size, but according to the survey investing in Bitcoin was a more popular response than investing in traditional stocks.

If that kind of runaway popularity doesn’t move you in itself, consider that it could translate into $40 billion dollars running like a river directly from Biden’s $1.9 trillion stimulus package into Bitcoin.

In the same week, Bank of America strategists suggested to Bloomberg that the price of BTC can be moved 1% for just $93 million.

Bank of America strategists said in a note to Bloomberg on Wednesday: “Bitcoin is extremely sensitive to increased dollar demand. We estimate a net inflow into Bitcoin of just $93 million would result in price appreciation of 1%, while the similar figure for gold would be closer to $2 billion or 20 times higher. In contrast, the same analysis for the 20-year-plus Treasuries shows that multibillion money flows do not have a significant impact on price, pointing to the much larger and stable nature of the U.S. Treasuries markets,”

If you take the survey and projections on face value, you could surmise Bitcoin prices will be moved by over 430% by the influx of $40,000,000 flowing in from invested U.S. COVID Relief money.

See also: How to Buy Bitcoin (BTC)

It seems reasonable to expect the 12 month Bitcoin bull run to continue, making it the crypto success story of 2021, right?

DeFi Could Steal Bitcoin’s Thunder

Before the Bitcoin bull run, DeFi was a strong competitor as the most dominant story in crypto. BTC’s new price heights have made the world’s most famous cryptocurrency again the center of attention. Bitcoin may always be the star of the cryptoworld and certainly has seen wide popularity and acceptance as a store of value, but Ethereum’s fortunes have generally kept pace with and possibly exceeded Bitcoin since the end of last year.

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Since December 2020, Bitcoin has risen from over $28,000 to more than $58,000 (up roughly 207%). Ethereum has traveled from more than $746 to over $1800 (up roughly %240).

This week, Bank of America published a report titled “Bitcoin’s Dirty Little Secrets”. Excerpts from the report are unflattering to the world’s most famous cryptocurrency.

Some of the statements coming from the report include:

“The main argument for Bitcoin is not diversification, stable returns, or inflation protection, but sheer appreciation…”

“There is no good reason to own BTC unless you see prices going up…”

And they point out Bitcoin’s environmental impact is not desirable, stating: “we calculate that a $1bn dollar inflow into Bitcoin is equal to 1.2mn cars driven over the course of a year or 12.7mn barrels of oil.”

They go on to extol the virtues of Ethereum, stating in the report: “Bitcoin is the most talked about cryptocurrency but Ethereum [the blockchain] has more features, including being more flexible in its hosting of decentralized finance (DeFi) than the Bitcoin blockchain.”

“DeFi does, however, show the opportunity which (distributed ledger technology) offers to finance. We believe that one of the best differences against being disintermediated by DeFi would be mainstream finance grasping these opportunities.”

The Hopes and Fears of DeFi…

As a digital currency, Bitcoin is simply designed with a more limited range of use cases compared to Ethereum which has smart contract capabilities. Arguably, Ethereum is the needed sequel to Bitcoin’s success. But how will their performances compare in 2021?

“Bitcoin is the asset of choice for investors looking for a store of value investment characteristics in the cryptocurrency market. Success then is an ongoing price appreciation for this asset. And appreciate it will as long as investors continue to believe in the future of blockchain and cryptocurrencies. Ethereum, on the other hand, is not only a cryptocurrency. It is a network that supports smart contracts, Dapps (decentralized applications), and Defi (decentralized finance) projects. Investors that are looking to invest in up-and-coming tech should pay extra attention to this crypto asset. Over 41 Billion dollars is currently locked in DeFi projects on Ethereum blockchain compared with 4 Billion only 8 months ago. That’s what success continues to look like for Ethereum this year as well – ongoing expansion and innovation,” Tally Greenberg, Head of Business Development at Allnodes said.

Phase 0 of Ethereum 2.0 – known as “Serenity” – launched on December 1, 2020. The hope for this upgrade to the Ethereum network is meant to address the needs for speed, efficiency, and scalability.

“BTC is unlikely to be dethroned as the leading cryptocurrency, but the growth shown on the Ethereum blockchain is hard to bet against. They will naturally be compared ‘against’ one another although this makes little sense from a functional point of view since each is vying for separate and mutually beneficial use-cases. BTC’s ‘digital gold’ narrative is straightforward which is beneficial for attracting new users who may be intimidated by the apparently more complex and dynamically evolving ETH narrative,” Jason Peckham, Analyst at Invictus Capital said.

It remains to be seen whether Ethereum 2.0 will handle the need for speed to support the DeFi range of use cases.

“To me, Ethereum looks very attractive for long-term purchases, since it has a much greater technical potential for application than Bitcoin. The Ethereum blockchain programmability offers incredible growth opportunities. Bitcoin with its limited emission is rather a tool for saving and paying. Ethereum, in turn, is a tool for real usage of blockchain technology in third-party projects,” Dyanis Zabauski, CEO of Coinmatics said.

But nevermind the actual real-world uses – can Ethereum compete with Bitcoin’s price performance?

“I think it’s highly likely that ETH will beat BTC in terms of price performance in 2021… Ethereum has not fully realized the benefit from the growing popularity of DeFi services and NFTs. The exploding NFT market will directly benefit the value of ETH and I think that ETH has room to grow until its price encompasses the current excitement around NFTs,” Noam Levenson cryptocurrency writer and founder of Narrow Straight Writing.

Some experts point to lagging performance as a reason to keep an eye on Ethereum, as we may see much more movement in 2021.

“From a relative performance standpoint, ETH the second-biggest cryptocurrency is lagging Bitcoin up only 20% from it’s All-Time Highs vs Bitcoin 175%. In previous cycles, we have seen ETH catch up to BTC growth when BTC begins to correct because the profits taken from BTC are cycled into altcoins. Because ETH is one to two cycles back from BTC in its growth cycle it makes sense that return on the laggard would outperform the larger market cap of BTC from here,” Jake Wujastyk Chief Market Analyst at TrendSpider said.

Until Ethereum 2.0 is a known quantity, there will be doubts about its ability to meet the already tremendous need for bandwidth to support transactions.

“Ethereum might beat Bitcoin in terms of percentage gain this year. So far in 2021, ETH has increased by value by nearly 150%, while bitcoin has gone up around 90%. However, it is unlikely that ETH will take over in terms of market capitalization because bitcoin is the cryptocurrency with the most people behind it in terms of adoption and use. Many view bitcoin as digital gold and major corporations and institutional investors are adding it to their balance sheets. Ethereum is unscalable in its current iteration and acts more as a platform for decentralized applications than a store of value” Ben Weiss, president and COO of CoinFlip said.

The launch of an improved Ethereum network is a testament to the strength of the project – but also represents change. Change conveys risk – while Bitcoin is simple, immutable, and constantly rising in value.

“I am not yet convinced DeFi is as groundbreaking as its followers deem it to be. The idea of yield farming sounds a great deal like smart contract hot potato with investors jumping from project to project, hoping they aren’t the last ones to hold the bag,” Don Wyper, COO at DigitalMint said.

Institutional investors have been key to driving the value of Bitcoin over the past 12 months. Will those same traditional investing giants turn their attention to Ethereum?

“Eventually some institutional investors will acquire ETH in order to expand their crypto exposure, while others will trade the recently launched CME ETH futures (interest is still low with volumes 8% of the CME BTC Futures). Others will acquire ETH in order to utilize and experiment with some of the applications, particularly in DeFi. However, I don’t see much movement comparable to bitcoin in the near term,” Jason Lau, COO at OKCoin said.

Conclusion

As many respondents pointed out, comparisons between Ethereum and Bitcoin make sense from an investor point of view, but the comparisons don’t go much further than that.

“BTC and ETH are different: BTC is a currency token while the ETH is a utility token. If mainstream institutional investors get into ETH, it would mean that mainstream institutions validate not only the current value of ETH, but also the Ethereum ecosystem as a whole. We have not seen signs of mainstream institutions being involved in Ethereum’s applications. So, in order for institutional investors to get on board, it would take more time and market education throughout 2021 and beyond,” Haohan Xu, CEO of Apifiny said

It may take a shift in mainstream understanding – or even a mild learning curve – to get traditional investors who have tried the familiar Bitcoin to understand the power of DeFi, but it seems the mighty bull run market is raising all ships in the cryptoworld and institutional investors are already getting on board.

“Institutional investors are already getting on board with Ethereum. Just recently, Grayscale, the world’s largest Crypto asset manager, purchased more Ethereum than Bitcoin for a change. Chinese public firm Meitu also grabbed 15K of Ether not too long ago. Galaxy Digital’s ETH funds raised 32 Million in less than a month. The launch of Ethereum Futures on the CME, the launch of Canadian ETH ETFs, and we’re just scratching the surface here… I anticipate a further surge of institutional investments in Ethereum. This is just the beginning,” Greenberg said.

Cover image modified from photo by Mater Miliano from Pixabay

See more from Benzinga

Ethereum Mining Difficulty Registers a New As ETH Price Targets New ATH of $2500

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Ethereum network’s mining difficulty peaked to a new all-time-high 5,950,622,727,915,080, breaking the previous ATH of 5,946,888,973,277,870. The rising mining difficulty comes at a time when there is a lot of discussion around Ethereum’s rising gas fee and traders shifting to other platforms.

📈 #Ethereum $ETH Mining Difficulty just reached an ATH of 5,950,622,727,915,080 Previous ATH of 5,946,888,973,277,870 was observed on 16 March 2021 View metric:https://t.co/s9t4z9o8ba pic.twitter.com/WmUnPbib7y — glassnode alerts (@glassnodealerts) March 20, 2021

The on-chain metrics for Ethereum look quite strong as the demand for ETH around $1,800 price has been quite significant. ETH price has also seen a trend reversal with price narrowly missing the head and shoulder pattern formation followed by a bullish breakout which might help the second-largest cryptocurrency retest its previous ATH of $2,036. One analyst predicted that ETH could be well on its way towards $2,500.

Apart from growing demand, the increasing volume of ETH locked in ETH 2.0 mainnet could also lead to a supply crisis, and at a time when its institutional offering has just begun, the supply crunch could help its price further.

Altcoin Market Cap Nears ATH

Bitcoin’s massive growth this bull season has overshadowed most of the other developments as the top cryptocurrency more than tripled its 2017 high and its market cap reached the $1 trillion mark for the first time. Along with Bitcoin, the altcoin market has also grown to new highs and registered a new ATH of $684 billion.

The Altcoin market’s new ATH has propelled it to the same levels as 2017 and if it mimics the previous market movements, the market cap could grow exponentially. The fact that Ethereum and many other altcoins have already registered new ATHs, the next bull cycle could see these altcoins rise further as talks of Bitcoin being in a supercycle grow stronger.

Rekt Capital, a crypto analyst pointed out the recent altcoin market cap ATH and how it is at the same level as the 2016 post which the altcoin market cap registered a new ATH of $473 Billion. The 2017 high was first breached in early February and retested towards the end of the month. The month of March saw the altcoin market cap add another $200 billion to its 2017 high.

Altcoin Market Cap launched into new All Time Highs from the very same level that launched Altcoin Market Cap into new December 2017 All Time Highs A perfect example of market cyclicality if there ever was one#BTC $ETH #Bitcoin https://t.co/h1kkiZ4SLj pic.twitter.com/5sMEbkS4BD — Rekt Capital (@rektcapital) March 20, 2021

To keep track of DeFi updates in real time, check out our DeFi news feed Here.

Ethereum Could Overtake Bitcoin, Messari Analyst Says

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Bloomberg

(Bloomberg) – For almost a half century, labor organizers in California have had a unusual right: Under a state regulation, they can walk onto the premises of an agricultural business and recruit workers to join a union.The regulation is now before the U.S. Supreme Court in a case that critics are looking to turn into a blockbuster decision strengthening property rights and curbing regulatory power. The court will hear arguments Monday on a constitutional challenge to a 1975 rule that grew out of the efforts of Cesar Chavez to give farm workers collective bargaining rights.Conservative legal groups and the U.S. Chamber of Commerce are opposing the access regulation, and trying to leverage a court that in recent years has bolstered the rights of landowners and curbed the clout of unions. It will be the first case on those topics for Justice Amy Coney Barrett, whose confirmation in October gave the court an even stronger conservative majority.The case was filed by two businesses that have tangled with union organizers: Cedar Point Nursery, which grows strawberry plants in the northern California town of Dorris, and Fowler Packing Co., a Fresno grower of grapes and other fruits. They say the regulation strips agricultural companies of their right to control who comes onto their property and forces them to allow disruptive protests. The growers are represented by the Pacific Legal Foundation, an advocacy group that fights what it views as government overreach.“The aim of the access regulation isn’t to set up a table and inform,” said Joshua Thompson, a foundation lawyer who will argue against the rule on Monday. “It’s to intimidate, and that’s exactly what they tried to do to both of our clients.”Farm WorkersThe regulation implements California’s Agriculture Labor Relations Act, a 1975 law that gave farm workers in that state the type of collective bargaining rights other laborers already had under federal law.The access regulation, however, goes beyond federal law, saying a specified number of union organizers can be on farm property during non-work hours for three hours a day, as much as 120 days a year.The provision is “absolutely critical” for ensuring that workers understand their rights, said Victoria Hassid, chair of the California Agricultural Labor Relations Board, which issued the regulation.“A key component of the act is ensuring that workers are able to, if they choose, advocate to work together to fight for better working conditions,” Hassid said in an interview. “This really fundamentally is about being able to know that those rights exist.”The question at the Supreme Court is whether the access regulation violates the constitutional provision that requires “just compensation” when the government takes private property for public purposes. A San Francisco-based federal appeals court upheld the regulation.Bright LineThe growers say the constitutional clause automatically kicks in whenever a regulation takes an “easement” – that is, when the government gives someone else the right to use private property. That bright-line approach “protects the fundamental right of property owners to exclude trespassers from their property,” the companies said in a court filing.The growers compare their case to a 1982 Supreme Court ruling that said New York was taking private property by requiring landlords to allow the installation of cable-television equipment in their buildings.But 17 states and the District of Columbia said the categorical approach would mean a “sea change,” and raise questions about a “staggering array” of laws that rely on government inspections of private property for health and safety reasons.The growers and their allies say those inspection laws wouldn’t be affected. The Chamber of Commerce said the government would still be able to require health and safety inspections as a condition for getting a needed license.Biden ChangeThe Biden administration is backing the California regulation but won’t be arguing Monday. In a two-page letter in February, acting U.S. Solicitor General Elizabeth Prelogar said the government’s longstanding view is that “physical entry on property short of a permanent occupation does not warrant the application of a categorical rule and is instead appropriately analyzed under a case-specific framework.”Prelogar’s letter was a change of position for the government after the Trump administration filed a brief opposing the regulation.Worker advocates say the California access regulation is even more important than it was in 1975 for informing vulnerable farm laborers of their rights. Those workers as a group are less educated, less likely to speak English, and more likely to be immigrants now than when the regulation was enacted, said Mario Martinez, who filed a brief defending the regulation for the United Farm Workers of America.“Outside of employers where there’s a collective bargaining agreement, you have routine violations of basic minimum wage laws, overtime laws, health and safety laws,” Martinez said. “You have rampant wage theft. You have a crisis of sexual harassment. In some cases, we uncovered forced labor, slavery where workers are being held against their will.”But Mike Fahner, whose Cedar Point Nursery is at the center of the case, says the regulation no longer makes sense in the age of social media. Fahner sued after organizers came to his nursery in 2015.“You can communicate with people around the world effectively without having to have access to a person’s private property and place of business,” he said.The case is Cedar Point Nursery v. Hassid, 20-107.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

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