They are the two pillars on which the industry is currently standing. Ethereum (ETH) and Bitcoin (BTC) have become two names synonymous with crypto and have risen to prominence as networks that are rivaled by few. Yet, with one clearly in front, could Ethereum ever truly overtake Bitcoin?
For anyone who has ever embraced blockchain technology or even inquired about it, these are probably the first two names you have heard. Yet, for as prominent as they both are, Bitcoin remains the standard bearer as the highest-priced crypto on the market. However, as Bitcoin and Ethereum remain the top two cryptocurrencies by market cap, could a change of guard ever truly take place?
Could a Flip Ever Happen?
Ethereum is a protocol developed by Vitalik Buterin that has been among the most popular in the industry. Moreover, it has consistently been building on its own infrastructure and ecosystem to develop a highly sought-after blockchain network.
Alternatively, Bitcoin is credited as the first cryptocurrency. Launched in 2009 by the pseudonymous Satoshi Nakamoto, it started it all. Thus, it has a kind of head start on all of its competition. However, Ethereum has consistently been on its tail and could justify a flip at some point.
The bull run of 2021 saw Bitcoin’s market cap exceed the $1.2 trillion mark. It was a significant moment in history, and it was followed up by 2022’s ravenous crypto winter. Contextually, Ethereum saw a rally to a $500 billion market cap that was equally impressive as BTC. However, the same treacherous 2022 saw it retreat below the $200 billion mark.
Moreover, these kinds of discussions have been taking place for years within the industry. Creating two sides of the aisle: those who believe it could be done and those who do not. However, there is an inherent belief that if it were to be possible, it would require Ethereum to surpass Bitcoin in market cap.
That prospect seems incredibly far-fetched considering the positions of both, but is it impossible?
Currently, both assets are still first and second in overall market cap, respectively. Specifically, Ethereum has a market cap of $215 billion, while Bitcoin has a market cap of $509 billion.
Subsequently, the difference is astounding, which makes the premise of a potential flip even more interesting. Ethereum would have to more than double its market cap in order to surpass Bitcoin. Thus, it would need to execute that step to eventually overtake it. Is it possible?
Ethereum (ETH) Functionality
The primary hope that lies in Ethereum’s prospect of overtaking Bitcoin is in its functionality. There were many who thought that the highly publicized Merge event could make ETH some headway. Specifically, its transition from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) consensus mechanism
Although the development did not flip the script, it presents the greatest chance that the protocol has. Bitcoin is primarily utilized as a wealth tool for investors, and that is the reason for its catapulting value since its inception. Alternatively, Ethereum is a programmable blockchain, that has become a haven for crypto developers.
Thus, as the industry continues to move forward and evolve, Ethereum has positioned itself at the forefront. The Ethereum blockchain has already been the preferred network for advanced decentralized applications and smart contracts which continue to enhance the pool of developers flocking to the platform.
There have been 3,000 dApps constructed on Ethereum, with statistics showing that the trend is likely to continue upward. Subsequently, as the entire Web3 ecosystem continues to develop and grow, much of that progression is taking place on Ethereum. Therefore, it is important to note that Bitcoin’s age could make it unable to match the utility provided by ETH.
Ethereum’s smart contract capabilities are at its core. In 2015, the functionality where added, and more than 3,900 developers joined the ecosystem in 2021. Thus, it had appropriately been perceived as the most active blockchain on the planet. Still, that growth is only continuing, not only with the Merge in 2022 but with the recently integrated Shanghai upgrade.
Bitcoin (BTC) Current Status
Although its functionality is certainly an aspect that it excels at, Ethereum does boast a host of competitors. Moreover, alternatives have emerged to challenge ETH in the avenue of functionality. Leading to protocols like Solana being labeled “Ethereum Killers.”
Conversely, although utility can breed competition, there is no competitor that can beat Bitcoin at being first. Moreover, the adoption and status that BTC has embraced since its development has granted it something that no other digital asset may ever be able to replicate.
The headstart it got over every alternative presents a nearly impenetrable lead over the competition. Subsequently, Ethereum potentially overtaking Bitcoin is something that could happen, but certainly not anytime soon.
Additionally, as fiat currency continues to be threatened by macroeconomic factors, Bitcoin only grows in necessity. The wealthy remain attached to the asset as the US dollar falls, and international tensions over currency mount. Bitcoin is poised to present a relatively safe alternative as an asset fixed in value.