In this post, we will discuss two topics first one “will ethereum overtake bitcoin” and the other one is “reasons for ethereum price drop”.
*** DISCLAIMER – please read the full post thoroughly before passing any hate comments. This article is not meant for the promotional purpose, it is for educational purpose. We are not financial advisors and we will not responsible for any losses or profits it is all your’s responsibility. This post is just for educational purpose.
Reasons for Ethereum price drop
First lets we understand this topic because then it will be easier for us to understand our main topic “will ethereum overtake bitcoin“.
We have seen that ethereum has dropped from 1500 to 200 USD this year. We all know that until now this year was not good for the crypto market. People are very much hoping for the approval of bitcoin ETF which will bring trillions of dollars to market. We have seen this year ethereum has dropped at a much faster rate than bitcoin. So there are basically two reasons behind this.
1 – Due to the large numbers of ICOs launched ( main reason)
Due to a large number of ICOs being launched at ethereum platform so it gets accumulated to respective ICO developers. And they dump this accumulated ethereum to encash it for their purposes like marketing, cash payments, office bills etc. This results in the huge selling order of etherium at crypto trading exchanges.
2 – Whales face difficulty while pumping ethereum at 0.10 btc/eth
Right now the etherium is 0.03 btc and maximum it had reached 0.11 btc. It is difficult for whales to pump ethereum after 0.10 btc so they dump ethereum. I will explain this reason in the next topic “will ethereum overtake bitcoin” because it is correlated. (below)
Will ethereum overtake bitcoin
This question generally asked by many crypto enthusiasts. I will answer this question with the help of facts and figures. you will also get to know about the explanation of the reason which I was talking above in this answer.
As I said above that it becomes difficult for whales to pump ethereum when ethereum reaches 0.1 with respect to bitcoin. Also, we have to know the fact whales play a crucial role in determining the price of any coin.
For ethereum to overtake bitcoin, it should become 0.1 btc to 1 btc or more. But here comes circulating/total supply in the role. Imagine if the price of 1 ethereum = 1 bitcoin then in order to buy 10 eth we require 10 btc and also in order to buy 30 million ethereum we require 30 million btc which is not possible as the total circulation of bitcoin in 21 million. So in simple words, it will not happen due to btc/eth trading pair and difference in the circulating supply in the market.
Let’s take bitcoin dominance as a factor everything will be clear. Bitcoin has 30 % of the dominance in the crypto market. Ethereum can beat bitcoin in total market cap in future but not in per coin price. It is only possible in a hypothetical situation where everybody starts dumping btc and pumping eth. But it has to be done in such a way that it deteriorates the ratio of demand and supply of btc in the market which is not possible because of the huge difference in circulating supply of btc and eth which is nearly 80 million coins. And keep in mind that major decisions like futures trading, ETFs will be firstly applied on btc. So btc is the foundation of huge money inflows in the crypto market. So btc will never lose its dominance and it will be the mother cryptocurrency.
Now It is clear that ethereum can’t overtake bitcoin means 1 ethereum token’s value can never be more than or equal to bitcoin. Now let’s see what will be the possible maximum value of ethereum in terms of bitcoin. Many experts say that 1 ethereum can never be more than 0.17 bitcoin in any kind of bull run. And also this makes sense because the total circulating supply of ethereum at present is 100 million and if we multiply it by 0.17 then it becomes 17 million which is the total circulating supply of bitcoin at present. so from here, we can conclude that ethereum can never surpass or overtake bitcoin. But yeah it can reach maximum up to 0.17 btc in a good bull run.
Future developments in Ethereum
At present ethereum can handle 15 transactions per second and also takes high fees. There are many coins now which can handle 1000 of the transaction within a second and no transaction fees. So ethereum is planning to transform into 2.0 version which can handle 10000x scale. Vitalik the founder of ethereum is planning to change the platform from proof of work to proof of stake to enable huge scaling. This would be beneficial for ethereum in future. You can read about this more in detail here.
If you like this article then do share it with your friends. You can also ask any query through the comments section below or you can contact me here. My twitter id – @sumitsg1997 join for instant post updates.