Investing.com – After outperforming it again significantly, the debate is gaining momentum over whether ETH can soon overtake BTC as the world’s most important cryptocurrency.
Ethereum (ETH) has outperformed Bitcoin (BTC) since the start of the year, increasing by more than 320%, while BTC has only increased by 54%. In the past 12 months, the difference is even more noticeable: Bitcoin is up 280% while Ethereum is up over 700%.
Mike McGlone, senior commodities strategist at Bloomberg Intelligence, said this situation could worsen until the “flipping” becomes a reality, although it will not prevent Bitcoin from reaching its $ 100,000 goal.
In a tweet that has been making the rounds in the relevant industry magazines since yesterday, the analyst wrote:
“Ethereum in 2021 is Bitcoin’s trailblazer for $ 100,000: Flippening? Should Bitcoin keep up with Ethereum’s performance this year, the price of the number one cryptocurrency would approach $ 100,000. Although Bitcoin is on that path, it looks like little will stop the Ethereum flipping. “
Flippening is considered an event among Ethereum fans related to the fact that ETH overtakes Bitcoin in terms of market capitalization. Ethereum is still worth more than twice as little as Bitcoin and is responsible for a little more than a quarter of the total market capitalization.
The dominance of Ethereum is increasing
But this value is clearly increasing. Bitcoin’s dominance has fallen sharply after reaching a high of over 70% in December 2020. The so-called BTC dominance is currently 45.5%. This shows the trend that crypto traders are increasingly shifting their investments to other digital assets.
And Ethereum was one of the main beneficiaries. Its dominance in the overall cryptocurrency market has grown from around 10% in December 2020 to 20% at the time of this writing.
A key factor behind ETH outperforming BTC is the rise of non-fungible tokens (NFT) and decentralized finance, two areas where most projects are based on Ethereum.
“The NFT sector is basically the real growth catalyst on Ethereum (+ 18% in the last 7 days), just like the DeFi applications were last summer, with weekly trading volumes the first time in history Exceeds 300 million dollars, “as 21Shares, a provider of physically deposited crypto ETPs, writes in a note.
Another factor lies in the technical developments of the Ethereum blockchain, which further increase the attractiveness of the cryptocurrency. On August 5th, Ethereum updated its technology with the London Hard Fork, which brought several improvements that were greatly welcomed by the market.
“After a long anticipation, the Ethereum upgrade called the London Hard Fork took place. Five different suggestions for improvement were implemented, with EIP-1559 being the most anticipated,” said the crypto data platform IntoTheBlock in a press release. The upgrade has the potential to “fundamentally change the way in which ETH is rated.”
With the EIP-1559 upgrade, the argument of the supply shortage due to the “burning” of coins should also flow into the Ethereum rating, similar to Bitcoin. So it is probably only a matter of time before Ethereum can continue its outperformance against Bitcoin. In the long run, this could actually lead to flipping.
According to data from the Blockchain Center, Ethereum has already overtaken Bitcoin in terms of network transactions and total transaction fees, while ETH is almost on par with the mother of all cryptocurrencies in terms of daily exchange volume.