Bloomberg analyst asserts that Ethereum can pave the way for $100,000 in Bitcoin


Ether (Ethereum) Outperforms Bitcoin (Bitcoin) In terms of year-to-date market performance, compared with BTC’s 54% return, it has risen by more than 320%. However, according to Mike Magron, senior commodity strategist at Bloomberg Information, Bitcoin will soon catch up with the rise of Ethereum, which may even push its price per unit up to $100,000.

“If Bitcoin is to catch up with Ethereum’s performance this year, the price of the number one cryptocurrency will be close to $100,000,” the analyst Tweet August 9th as BTC price Break through 46,000 USD.

Bitcoin performance and Ethereum performance (2021).Source: Bloomberg Intelligence

Although McGlone did not discuss in detail the factors that make Bitcoin match the annual earnings of Ethereum, his earlier report on cryptocurrencies cited some catalysts that could push the price of the benchmark cryptocurrency to a six-figure club. The report states:

“About 80% of Bitcoin and Ethereum, most of the performance of the Bloomberg Galaxy Crypto Index (BGCI) comes from the broader view that the first-born cryptocurrency is a global digital reserve asset, as well as the acceleration of financial technology and currency systems Digitizing. “

Trillions of dollars on the sidelines

Bitcoin supporters believe that it can compete with the U.S. dollar as a global reserve asset. An important reason is the fixed supply cap of cryptocurrency. For supporters, A more robust currency than the U.S. dollar (The Federal Reserve printed $3.1 trillion in 2020 alone).

As a result, Bitcoin closed up 260% last year, reflecting investors’ perception of it as a tool to counter dollar-led inflation.

Bitcoin price performance in recent years. Source: TradingView.com

In the early 2021 survey, Goldman Sachs also pointed out Institutional investors’ demand for Bitcoin is suppressed, Including pension funds, global sovereign wealth funds and foundations. Nevertheless, even if they have trillions of dollars in reserves, due to the lack of clear encryption regulations, qualified investors cannot put these funds into the Bitcoin market.

Analyst at Autonomous Capital Management statement Regulated Bitcoin exchange-traded funds will accelerate the adoption of Bitcoin in institutions. In addition, they stated that although investors view Bitcoin as a highly volatile asset, its lack of correlation with traditional risk factors is like music in their ears.

The Autonomous Analyst added:

“If we assume that Bitcoin gets the same weight as the current gold weight in the investor’s portfolio, its price will be 2.8 times higher, or approximately $112,000.”

Ethereum competition

Despite the adoption prospects on Wall Street, Bitcoin’s dominance has Serious fall After reaching a peak of around 73% in December 2020. It is now 47.17%, reflecting that traders have shifted their investment to other digital assets.

In particular, Ethereum has become the biggest beneficiary of the decline in Bitcoin’s dominant index. Its dominance in the cryptocurrency industry has climbed from 10.06% in December 2020 to 20.05% at the time of writing.

The Ethereum dominance index almost doubled in 2021. Source: TradingView.com

Part of the reason behind Ether’s rising dominance stems from Explosive growth of non-fungible tokens (NFT), They are digital files whose originality and scarcity can be verified through a public ledger.

In addition, a The prosperity of decentralized financeComposed of lending and other financial services built on the Ethereum blockchain, it has promoted the adoption of Ethereum in the crypto public.

Ethereum developers are also taking steps to expand the blockchain. On August 5th, Ethereum used the so-called London hard fork The goal is to become a mature proof-of-stake agreement in the future.

The update also increased the deflationary pressure of supply, and the improvement proposal EIP-1559 brought a fee reduction function. On the first day alone, EIP-1559 eliminated USD 2 million worth of ether.

As of Monday, the feature burned approximately $5.5 million worth of ETH. Data obtained on the Ultrasound Money website.

related: Vitalik: After the successful upgrade of Ethereum in London, “more confident in the merger”

McGlone pointed out that Ethereum’s past performance indicates that by 2022 or 2023, its market value may exceed Bitcoin. Despite this, analysts still maintain a Bitcoin price target of $100,000.

The market value of Ethereum is expected to reach the peak of Bitcoin in 2023.Source: Bloomberg Intelligence

“Although we have seen Bitcoin on this road, nothing seems to be able to stop the process of Ethereum flipping,” he said.

So far, Ethereum has surpassed Bitcoin in terms of network transactions and total transaction fees. Data display from the blockchain center.

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