Going back to its inception in 2009, Bitcoin (CCC:BTC-USD) has always been known as the No. 1 cryptocurrency in terms of price, market capitalization, trading activity and name recognition. However, some fans of Ethereum (CCC:ETH-USD) seems to be anticipating a dethroning of Bitcoin as Ethereum gains traction.
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There’s a large gap in the prices of the two cryptocurrencies. Yet, it’s been posited that not just one, but both of them are destined to hit the $100,000 mark.
Moreover, on the way to $100,000, there’s chatter that Ethereum will actually overtake Bitcoin. This could mean a number of different things: having more use cases, becoming more popular or even having a higher price at some point.
Is this talk nothing more than the fans speculating and trying to pump up their own accounts? Or, is there merit to the idea that Bitcoin is destined to slip to the No. 2 spot? Let’s dig a bit further into this fascinating controversy.
Analyzing the Ethereum Price
In the middle of May 2021, Ethereum rocketed its way up to $4,200 for a moment. However, the price got cut in half over the next couple of months.
ETH has bounced off of the $1,800 level before, so it shouldn’t be too surprising that it rebounded after hitting that level in July. Still, the magnitude of the rally was impressive.
Now the Ethereum price has topped $3,300 and there was no sense of panic in the air. Amazingly, the investors had gained 355% so far in 2021.
Now, let’s compare ETH to BTC. On Aug. 18, Bitcoin was close to $50,000, which meant that the investors could book a year-to-date profit of 68%.
Of course, a 68% year-to-date gain is nothing to sneeze at. Yet, we must admit that it’s nothing compared to Ethereum’s 355%.
It just goes to show that assets of lower prices can often move at a faster pace. Thus, if BTC is like gold, ETH would be the equivalent of silver.
Flipping the Script
Here’s a term that probably didn’t exist in the popular financial culture a decade ago: the “flippening.”
It’s a reference to the potential for Ethereum to switch positions with Bitcoin, thereby gaining the No. 1 spot in certain respects.
That’s a major problem with the flippening concept: it’s somewhat vague.
Will ETH overtake BTC in terms of price? Percentage gains? Name recognition? Use cases?
To be honest, it’s impossible to declare a winner until the terms are clarified. Nonetheless, it’s exciting to engage in a debate about the possibility of a flippening.
Mike McGlone, senior commodity strategist at Bloomberg Intelligence, apparently hasn’t been afraid to engage in this debate.
He seems to suggest that at least one of the two crypto coins could reach the lofty price of $100,000.
Little Can Stop It
Here’s McGlone’s tweet on the matter:
If #Bitcoin were to catch up to #Ethereum‘s performance this year, the No. 1 crypto’s price would approach $100,000. Though we see Bitcoin on that path, there appears little can stop the process of Ethereum flippening.
It’s an interesting argument: BTC’s momentum could match that of ETH, so Bitcoin therefore might reach $100,000 soon.
But if there’s actually a flippening, this seems to imply that Ethereum could also hit $100,000, since it would be the dominant cryptocurrency.
While we’re browsing through tweets, here’s one from CryptoQuant Ki Young Ju which cites supply-demand factors:
$ETH might reach its all-time high earlier than $BTC in the long term. 1/ Current $ETH price is closer to aTH compared to $BTC. 2/ Higher demand, lower supply. $ETH sell-side liquidity crisis still intensifies, while $BTC exchange reserve stopped its downward trend in May.
On the supply-demand topic, Blockware Solutions lead insights analyst Will Clemente seems to lend credence to Ju’s contention.
“Illiquid Supply Shock ratio has been a good leading indicator over the past few months. Impulses in both directions have resulted in price action following,” Clemente explained.
The Bottom Line
The last thing we need now is a war between Bitcoin holders and Ethereum fans.
Really, we should all be on the same side in this debate. Everyone can make money here, in the long term.
Still, it’s fun to consider the possibility of both Bitcoin and Ethereum eventually reaching the $100,000 mark.
It doesn’t matter which one gets there first. By that point, we’ll all be celebrating huge gains.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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