Ethereum will challenge Bitcoin’s hegemony
In late 2021, a new cryptocurrency appeared that appeared to have come straight out of a science fiction novel. Worldcoin offered free digital tokens to anyone willing to have their eyeball scanned. More than 100,000 people have registered. Demand suggests that 2022 could be the year alternative coins challenge Bitcoin’s supremacy.
In today’s column we make a number of predictions for the year ahead.
Bitcoin remains the largest and best-known cryptocurrency for the time being. It has a market cap of $ 887 billion, according to CoinGecko. This is about twice the size of the second largest ether. Amid the usual volatility, prices hit new heights in 2021 in hopes of greater mainstream adoption. In April, the Coinbase cryptocurrency exchange was listed in the US. In October, the first exchange-traded Bitcoin fund was launched in the US. Bitcoin’s price jumped above $ 67,500 in November before falling back below $ 50,000 this month.
The uneven price development will continue. The company’s interest in alternative currencies is not yet uniform. Tesla stated that holding Bitcoin as an alternative to cash proved its liquidity. Then it sold its stake and decided that Bitcoin could no longer be used to buy its electric vehicles.
The future of all digital tokens still rests with regulators. The US Securities and Exchange Commission has approved the continuation of a Bitcoin ETF because it holds futures contracts that are traded on a regulated exchange rather than Bitcoins directly. The world’s largest crypto exchange, Binance, remains unregulated and unlisted. It has clashed with the regulators in Singapore. China announced in September that crypto transactions were illegal. SEC chief Gary Gensler has warned investors could be harmed without further supervision.
As guard dogs dodge, the institutions worried that blockchain and cryptocurrencies could eliminate their expensive third-party services will continue to make claims on the sector. Governments will continue to promote their own central bank managed digital currencies.
Both should arouse more interest in Bitcoin’s rival Ether. Ether is used to buy non-fungible tokens – now a $ 15 billion market – and is at the heart of decentralized funding. Their technology does not depend on typical financial intermediaries such as banks.
In 2022, the Ethereum network that uses ether will be upgraded and is expected to turn into evidence of stake verification. This change requires far less energy than verifying the Bitcoin proof of work.
The switch should appeal to environmentally conscious crypto fans and encourage them to switch. The long-term bet of attracting crypto followers prefers ether, not bitcoin.
Source: Crypto News Austria