Ethereum
5 reasons why Ethereum (ETH) is currently much stronger than Bitcoin (BTC)
Arman Shirinian
Ethereum could be a more attractive option for investors than Bitcoin, and there are good reasons why
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Ethereum The price action certainly raises serious questions, as the second-largest cryptocurrency on the market is clearly losing steam and is unlikely to gain enough ground to rebound at this time. But basically, she has at least five reasons to recover sooner than expected.
Mount Gox has no ETH
The looming risk of a massive sell-off in Mt. Gox is one of the main factors weighing on Bitcoin. The trustee of the defunct exchange is expected to return a significant portion of Bitcoin to creditors, which could intensify selling pressure. Due to this, Ethereum has a clear advantage over BTC, which could enter the market and drive its price down.
German government not selling Ethereum
Selling pressure in the market was exacerbated by reports that the German government sold the seized Bitcoin. Bitcoin’s recent struggles are partly attributable to this action.
On Ethereum, there is no selling pressure from miners
Since the release of Ethereum 2.0, the proof-of-stake (PoS) consensus mechanism replaced the proof-of-work (PoW) method. This implies that Ethereum miners will no longer have to sell a lot of ETH to pay their overheads. Nevertheless, in order to cover their costs such as electricity, Bitcoin miners must constantly sell their Bitcoin.
ETH will also get an ETF
Ethereum, although not yet officially confirmed, is about to become its own exchange-traded fund, much like Bitcoin. Institutional investors could gain exposure to Ethereum through an exchange-traded fund without having to physically hold the asset, which could increase demand.
Bigger supply shock on ETH
The introduction of a transaction fee burning mechanism via EIP-1559 resulted in a significant reduction in Ethereum supply. A supply shock could occur for the asset due to this mechanism, which would reduce the total supply of ETH.
About the Author
Arman Shirinian
Arman Shirinyan is a trader, crypto enthusiast and SMM expert with over four years of experience.
Arman strongly believes that cryptocurrencies and blockchain will be of constant utility in the future. Currently, it focuses on news, articles with in-depth analysis of crypto projects and technical analysis of cryptocurrency trading pairs.