Connect with us


3 reasons why Ethereum may underperform Bitcoin in the short-term



The price of Ether (ETH) outperformed Bitcoin (BTC) by 173% from March 28 to May 15. The incredible bull made the token hit an all-time high of $ 4,380. However, when the cryptocurrency markets started a sharp decline on May 12, the trend began to reverse, and since then Ether has underperformed by 25%.

Some might say it’s a technical adjustment after a strong rally. While this partially explains the move, it rules out some critical factors, including the rapid advance of competitors in smart contract networks and the initial introduction of Bitcoin as the official currency.

Ether / Bitcoin price at Binance. Source: TradingView

Notice how the ETH / BTC ratio rebounded again on June 8, hitting 0.77, despite the price of ether remaining 36% below its all-time high and hovering near $ 2,800. To understand what might have influenced the ratio, analysts need to analyze the price drivers of Ether and Bitcoin separately.

Mike Novogratz may have been misinterpreted in his interview

Ether’s bull run may have got an extra leg due to intense praise from institutional investors. Traders could have felt a sense of urgency known as FOMO and immediately shifted their Bitcoin exposure to the leading altcoin.

On May 13th, New York Magazine published an interview with Mike Novogratz, the founder and CEO of Galaxy Digital. In an interview, Novogratz said:

“All of a sudden you have decentralized finance and NFTs both on Ethereum roughly at the same time, with wildly accelerated growth.”

Novogratz was then asked how much higher ether could reach, to which he replied:

“You know, it is dangerous to make predictions about the highs. But could it get as high as $ 5,000? Of course it could. “

While one Ethereum holder may have interpreted this as a prediction, others may have taken it as a wild guess, likely depending on general crypto market conditions.

However, about a week later, a report from Goldman Sachs revealed that the global investment bank believed ether had a “high chance of overtaking Bitcoin as the dominant store of value.” Interestingly, one of the main quotes in the report comes straight from Novogratz’s interview with the New Yorker.

At its peak, Binance Chain controlled 40% of DEX volume

While Ethereum has maintained its 80 percent dominance in net worth in decentralized financial (DeFi) applications, Binance Smart Chain (BSC) has achieved a 40% market share on DEX exchanges.

PancakeSwap DEX daily volume vs. Top 10. Source: DeBank

The successful growth of the DeFi industry and non-fungible token (NFT) markets resulted in severe congestion on the Ethereum network and increased media charges to $ 37 in mid-May. This bottleneck sparked an exodus of activity into competing networks, and PancakeSwap was best placed to capture this flow.

Connected: Because of this, one analyst says Bitcoin will outperform Ethereum in the short term

To make matters worse, important DeFi projects have been expanded to Binance Smart Chain, including the earnings aggregator Harvest Finance and the decentralized exchange aggregator 1inch. Investors quickly realized that the trend could continue as the competing smart contract network offered a simple solution for dApps looking for cheaper alternatives.

No country adopts the “Ethereum standard”

Bitcoin may have underperformed in the past 30 days because it failed to break the $ 42,000 resistance multiple times. However, an important milestone was reached when El Salvador became the first country to introduce Bitcoin as legal tender on June 12th.

After the Central American country passed the decision-making law, a handful of other Central and South American countries began to discuss the benefits of a similar path.

Ethereum is undergoing a redesign that will change the spending rate and the way companies are paid to keep the network secure by moving away from the proof of work model. Meanwhile, Bitcoin ensures that every upgrade is backwards compatible and maintains its strict monetary policy.

This is the main reason Ether won’t outperform Bitcoin for the next 12 months, or at least until there is a better understanding of what the dominance of smart contracts will be on the Ethereum network.

Professional investors avoid uncertainty at all costs, and the cryptocurrency markets already offer a lot of it. There is simply no reason for institutional investors to ignore the risks while competing networks eat Ethereum’s lunch.

The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement involves risks. You should do your own research when making a decision.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


Cryptocurrency Scams, Hacktivism Will Rise in 2022: Norton



Norton claims that cyber activism will gain momentum over the next year and that crypto scams are likely to increase as more users shop. Additionally, the cybersecurity firm predicts that scammers will target people suffering from natural disasters. Norton warns that there will be more hacking, more scammers and a greater need for online security in 2022. There are likely to be more casual investors in the cryptocurrency market over the next year, suggesting more scams in this segment. Phishing campaigns to steal user credentials or tech support scams to separate people from their money are likely to increase.

The cybersecurity predictions for the next year were released by Norton. At the top, the company predicts an increase in cryptocurrency fraud as several countries seek to regulate it. The rise of casual investors who do not fully understand the nuances of how cryptocurrencies work will allow scammers to take advantage of it. “Scammers have used these misunderstandings to separate people from their coins, and with this new group of new users, we expect the number of scams to rise sharply. They will likely look like some of the old scams, but we also expect new and creative attempts to target this new, larger group of potential victims, ”the company states.

Norton also says the need to go online and have all identification documents online during the pandemic can lead to theft, identity theft, and other scams. The company also predicts that cyber criminals could run phishing campaigns to steal login credentials or tech support scams to keep people off their money. While most attacks are aimed at money, some tend to use cyber intruders as a form of protest.

The company adds that hacking activists or hacktivists will use their knowledge to produce political results. They do this by disrupting governments, spreading fear, or exposing information. Hacktivism and cyber terrorism were alive in 2021, revealing information that governments would have preferred to keep secret. Norton believes that given their range and potential influence, these attacks will continue, if not increase.

In 2022, scammers will continue to exploit disaster-hit users. Norton says that whenever money flows from insurance companies or the government to victims of natural disasters, there is someone trying to take advantage of that situation by either fraudulent with stolen identities or by cheating on people directly. If the trend continues and there are more natural disasters and extreme weather events, Norton expects more scammers ready to make money.

After all, Norton predicts that artificial intelligence and machine learning will increase cybercrime. It will allow users to manipulate some forms of media and extract values ​​from large data sets. It predicts that with technology getting better and easier to use, deepfake technology will become a useful tool for criminals, scammers, stalkers, and activists.

Interested in cryptocurrency? We discuss everything about crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music, and anywhere you get your podcasts.

Cryptocurrency is an unregulated digital currency, not legal tender and is subject to market risks. The information provided in this article is not intended as financial advice, trading advice, or any other advice or recommendation of any kind offered or endorsed by NDTV. NDTV is not responsible for losses that may arise from an investment based on perceived recommendations, forecasts or other information contained in the article

Continue Reading


Experts Believe a Common African Cryptocurrency Can Boost Trade and Sustain Growth After Covid-19 – Emerging Markets Bitcoin News



Some economists from Africa have suggested that the continent now needs a common cryptocurrency and an integrated capital market to boost trade and sustain growth.

The importance of a common crypto

African business experts argue that a common cryptocurrency along with an integrated capital market is needed to boost trade and sustain growth on the continent after the Covid-19 crisis.

According to a press release from the African Development Bank Group (ADBG), these experts had put forward their arguments in a discussion about reforming the African financial system.

One of the experts cited in the statement, Anouar Hassoune, professor of finance and CEO of the West Africa Rating Agency, argued that a common cryptocurrency has the potential to reduce the cost of doing business. He explained:

We need to develop a cryptocurrency that is acceptable to every Member State. Better to do it on a continental scale and we have the know-how to do it. It’s a governance issue, not a technology issue.

Hassoune also suggested that such a cryptocurrency could serve as an alternative to monetizing some of the continent’s foundations such as gold and other commodities.

Emmanuelle Riedel Drouin, head of the department for economic and financial transformation at the Agence Française de Développement, is also quoted in the statement. Although the expert supports the idea, she warned that conditions must be met before such a common crypto comes onto the market. She stated:

“We shouldn’t forget that there is really a lot to be done on the digital infrastructure, on the development of payment systems, on the interoperability of payment systems – financial institutions to digitize delivery and payment channels.”

Africa needs a functioning, integrated capital market

Drouin added that while central banks play a crucial role, it is still important for economies to diversify sources of funding in order to reduce reliance on them.

Although many African countries have spoken out against privately issued cryptocurrencies, some have shown interest in developing their own digital currencies. In fact, one of those countries, Nigeria, has already adopted its digital currency, while Ghana is expected to do the same. It is the creation of such diverse digital currencies that some experts fear will diminish the possibility that Africa has a common goal of cryptocurrency of its own.

Meanwhile, the statement also quotes Augustine Ujunwa, an economist at the West African Monetary Institute who advocates a well-functioning integrated capital market. He explained:

Right now our markets are small, our countries are small and we need to take a regional approach to integrating markets. Before we get there, however, we need to harmonize our laws, regulations and protocols for our fintech and digital systems.

Regarding the role of central banks, the economist suggested that they should start now to think about innovative ways to finance the critical sectors of the economy.

What do you think of this story Let us know what you think in the comments below.

Photo credit: Shutterstock, Pixabay, Wiki Commons

Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement for any product, service, or company. does not provide investment, tax, legal, or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

More popular news

In case you missed it

Continue Reading


Congress holds landmark cryptocurrency hearing



WASHINGTON, DC – The CEOs of six cryptocurrency companies appeared in a landmark hearing in front of Congress on Wednesday to advocate how lawmakers should approach regulating the growing industry.

What you need to know

  • Six cryptocurrency CEOs testified before a House committee in the first major congressional hearing on digital currency Wednesday
  • Legislators are trying to find out how the booming industry should be regulated
  • Ohio Reps. Tim Ryan (D) and Warren Davidson (R) are working together to try to change the language in the infrastructure law that affects crypto
  • Davidson said Congress was getting better and better informed about the world of digital currencies

“This is the first time Congress has held a full hearing on cryptocurrencies,” said Rep. Patrick McHenry (R-North Carolina) at the beginning.

The digital currency world watched closely as CEOs asked questions from members of the House Financial Services Committee about why their industry should be taken more seriously.

“There are more than 220 million crypto holders worldwide. And around 16% of Americans have invested, traded, or used cryptocurrencies, “said Alesia Jeanne Hass, CEO of Coinbase Global Inc.

The crypto market has exploded to more than $ 2 trillion and Congress is trying to figure out whether it should be regulated like the traditional banking world or differently.

The CEOs argued that some guard rails will help legitimize the industry as it continues to grow, but too much government oversight could have a deterrent effect.

“I think it’s healthy that the industry is regulated. I think it’s already regulated in a lot of ways, ”said Samuel Bankman-Fried, CEO of FTX.

Jeremy Allaire, CEO of Circle, added, “We believe that dollars will soon be as efficient and widespread as SMS and email on the Internet.”

While some lawmakers remain skeptical, others non-partisan agree that embracing this new market is important and should strike a balance in regulation.

Rep. Tim Ryan (D-Ohio) has teamed up with Rep. McHenry (R-North Carolina) to try to change the regulatory language in the new infrastructure bill that they fear could lead crypto executives to to do business in other countries.

“We should work to fully understand the possibilities that the next generation of the Internet can offer Americans,” McHenry said during the hearing.

In an interview with Spectrum News on Wednesday, Ryan said, “There is an opportunity here for growth and jobs, and really for the United States to be a leader in this new technology.”

That first hearing was a big deal for the crypto world, but it’s just the beginning.

The Senate Banking Committee, chaired by Ohio Senator Sherrod Brown (D), will hold its own hearing on the matter next week.

Still, Congress is far from making any laws.

Rep. Warren Davidson (R-Ohio), a leading voice in Congress on crypto, left the hearing Wednesday, encouraged by the informed questions that were asked.

“I’m impressed with how much the knowledge gap has been filled by my colleagues,” Davidson told Spectrum News.

Davidson also supports the legislation that Ryan and McHenry put in place.

Continue Reading