Crypto strategist Benjamin Cowen recently weighed in on the possible performance of Ethereum (ETH) relative to Bitcoin (BTC) moving forward.
In his latest YouTube video, Cowen told his 783,000 subscribers that the Bitcoin dominance chart that tracks how much of the total crypto market capitalization belongs to BTC seems to be on a resilient uptrend.
In the meantime, the crypto analyst said that the Ethereum versus Bitcoin (ETH/BTC) chart seems to be moving in the opposite direction.
“To me, this just looks one higher low after another for Bitcoin dominance.
And for Ether/Bitcoin, it just looks like one lower high after another, right? Just one lower high after another.
Every time we get a lower high, everyone screams from the rooftops that this is it and the flippening is finally here. You fast forward a few more weeks and you just look back and guess what? It’s just another lower high.”
Cowen also insists that one of the key reasons why the ETH/BTC pair is not dropping as fast as it did in the 2018-2019 bear market is because of the amount of liquidity that is splashing in the space.
A major reason that it might be now taking a lot longer instead of just dropping as rapidly as it did in 2018/2019 is just that there is a lot more liquidity in the market currently than there was back then.
“There’s just so much more liquidity in the game and it’s just taking a lot longer for the Federal Reserve to remove that liquidity, but the liquidity is being removed.”
What Happens In The Long Term?
Ethereum and Bitcoin are the two largest cryptocurrencies by market capitalization, but they have different features and use cases. Bitcoin is designed as a digital currency and a store of value, while Ethereum is a platform for smart contracts and decentralized applications. Both have their advantages and disadvantages, and their price performance depends on various factors, such as supply and demand, innovation, regulation, adoption, etc.
There is no definitive answer to whether Ethereum will outperform Bitcoin in the future, as different analysts have different opinions and predictions based on their assumptions and models. However, some of the factors that could influence their relative performance are:
- Innovation: Ethereum is constantly evolving and introducing new features and upgrades, such as the recent transition to a proof-of-stake consensus mechanism, which aims to improve scalability, security, and energy efficiency. Bitcoin, on the other hand, is more conservative and resistant to change, which could limit its potential for growth and innovation.
- Adoption: Ethereum has a wider range of applications and use cases than Bitcoin, such as decentralized finance (DeFi), non-fungible tokens (NFTs), gaming, identity, etc. This could attract more users and developers to the Ethereum network, increasing its network effect and value. Bitcoin, however, has stronger brand recognition and reputation as the first and most dominant cryptocurrency, which could give it an edge in terms of adoption and liquidity.
- Regulation: Both Ethereum and Bitcoin face regulatory uncertainty and challenges in different jurisdictions, which could affect their price volatility and market sentiment. However, some regulators may view Ethereum more favorably than Bitcoin due to its utility and innovation potential, while others may view Bitcoin more favorably due to its simplicity and stability.
- Competition: Both Ethereum and Bitcoin face competition from other cryptocurrencies and platforms that offer similar or better features and services. For example, Ethereum competes with other smart contract platforms such as Cardano, Solana, Polkadot, etc., while Bitcoin competes with other store of value assets such as gold, real estate, etc.
Ultimately, the debate between Ethereum and Bitcoin as investments come down to an investor’s risk profile, time horizon, diversification strategy, and personal preference. Both have the potential to perform well over time as the world continues its shift to digital and cryptocurrency’s acceptance grows.