Ethereum (ETH) Will Rise Faster than Bitcoin (BTC) on Expectations of Altair Upgrade

Ethereum (ETH) Will Rise Faster than Bitcoin (BTC) on Expectations of Altair Upgrade

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Ethereum is recovering after the crash of the markets, the team of developers announced the next stage of the transition to ETH 2.0.

Experts point out that Ethereum is growing faster than bitcoin and may eventually become the leading cryptocurrency in terms of capitalization. At the beginning of the year, the capitalization of ETH was about $83.4 billion, and the capitalization of BTC was 6.5 times higher and amounted to $546.35 billion. Now, the capitalization of ETH and BTC is $343.7 and $797.6 billion, respectively, a difference of 2.3 times.

However, even if Ethereum surpasses bitcoin, the two cryptocurrencies will not compete for investors. Those who invest in BTC see it as a means of storing and transferring value. These investments allow, at best, to preserve capital from inflation or to slightly increase it.

Investors in Ethereum see it as an innovative startup that can soar by hundreds of percent. And these are less risky investments than ones in hi-tech projects of newcomers.

Ethereum is primarily a popular smart contract platform. But its popularity also affects the ETH quotes. Therefore, institutional investors view the two leading cryptocurrencies as a “cryptocurrency tandem”. According to the announced information, it follows that institutions often invest in BTC and ETH in a ratio of 60% / 40%. As for traders, they can transfer funds from BTC to ETH depending on the hype. Ethereum creates a hype situation much more often than the first cryptocurrency, so it can grow faster. Since the beginning of the year, ETH has almost quadrupled from the price of $736.

At the peak of growth in mid-May, its price was $4362, that is, an increase of almost 500%. Bitcoin at the beginning of the year was worth $29K, at its peak in mid-April, it updated its all-time high at $64.8K, that is, it grew by 123%. To date, the growth of BTC since the beginning of the year is 46%.

After the recent market crash, the growth of Ethereum is stimulated by the announcement of the team about the launch of the Altair upgrade. Danny Ryan of the Ethereum Foundation stated that this event will take place on October 27th. Altair will ensure the economic security of the Proof-of-Stake consensus algorithm to which the Ethereum blockchain is being transferred.

The previous London upgrade, which was implemented in the mainnet on 5 August, triggered a deflationary mechanism by burning part of the fees. After the London upgrade, ETH rose 60% over the month from a price of $2488 to a local maximum of $3965. Now Ethereum may grow even more, not only on the expectations of the upgrade but also due to the tight measures against cryptocurrencies in China. Prominent influencer and super-entrepreneur Elon Musk has suggested that the bans on cryptocurrencies in China are related to power shortages. Musk notes:

– Part of it may actually be due to electricity shortages in many parts of China. A lot of South China right now is having random power outages, because the power demand is higher than expected.

If Musk is right, Ethereum will gain even more supporters as its blockchain transition to the energy-efficient Proof-of-Stake consensus algorithm.