Is the time to sold all of your bitcoin and buy Ethereum?
The Bitcoin-Ethereum race has been in place ever since Ethereum comfortably took its spot as the number two cryptocurrency with a market cap dominance of 17.24%. While recent price performances have been underwhelming, to say the least, on the development front, Ethereum seems to be surging ahead.
Bitcoin’s popularity fell further after the long-fought Bitcoin energy debate resurfaced when Tesla CEO Elon Musk announced that his company had suspended vehicle purchases using Bitcoin owing to its energy consumption concerns. That coupled with the recent crypto market bloodbath had pushed many skeptics to reallocate their portfolios.
Amid this, the host of the Mad Money show, Jim Cramer was another Bitcoin bull turned Ethereum fan. Cramer in a recent interview explained why he preferred Ethereum to Bitcoin:
“I like Ethereum because people actually use it much more to be able to buy things. I’m going to continue to buy Ethereum. I just think it’s got a little more game because when you go buy an NFT, anything like that, everybody wants Ethereum. It’s more of a currency.”
In hindsight, Cramer joins a list of Ethereum bulls who have been rather excited ahead of Ethereum 2.0’s launch. The buzz around the much anticipated Ethereum update has been circulating in the crypto community for a while now. Phase 1 and 1.5 are scheduled for 2021, while the final release and full adoption i.e. Phase 2, is set to drop sometime in late 2021 or 2022. While Ethereum too saw some major lows amid the market downfall, it saw 13.63% price gains in the last week.
The former hedge fund manager, last week, citing the Chinese government’s bitcoin mining crackdown and the cryptocurrency’s role in ransomware attacks, said he “Sold almost all of my bitcoin. Don’t need it.”
Cramer’s love-hate relationship with Bitcoin is known by all. He invested in BTC towards the end of 2020 in fear of massive inflation. This year, in March he looked down upon gold and said that it let him down, and advised people to sell gold and increase their BTC holdings:
“If they listen to me, they’re going to drop half their gold. I’ve been saying 10% in gold since 1983. And now I say 5% in gold, 5% in bitcoin”
In the light of China’s crackdown on bitcoin mining and the recent ransomware attacks, Cramer is of the opinion that bitcoin “is not going up because of structural reasons.”
Ethereum’s red-hot run
Ethereum, the market’s largest alt, has been gaining a lot of traction, despite its price volatility. Over the past week, for instance, the alt’s price fiercely oscillated in the $1,700-$2,200 price band. Nevertheless, Ethereum witnessed a ‘historic day‘ on 28 June. For the first time in crypto-history, ETH’s address activity climbed above BTC’s address activity.
Commenting on the recent price action observed in the market, ConsenSys founder Joseph Lubin (who also worked on Ethereum), opined,
“The prices have risen… and there is so much intensity that essentially a few weeks ago it hit bit of a blowoff top, but we’re back to growing in price and the activity hasn’t stopped and the cycles that we’re seeing in out ecosystem… are compressed. We’ll see recovery as much faster.”
As far as the alt’s price was concerned, it has rallied over 20% since rebounding from its weekly higher low. At press time, ETH was seen clinging on to this very higher-low as its support and was trading at $2,134.67.
Additionally, NFTs, for now, thrive on the Ethereum ecosystem. The adoption of these tokens has been growing by leaps and bounds lately, and the same has rubbed off positively on Ethereum’s price. As a matter of fact, the number of NFTs sold on OpenSea, one of the most prominent P2P marketplaces, witnessed a wild spike in June. The same was highlighted recently by popular developer “icebergy.”
Ether likely to satisfy to be cryptocurrency-based exchange-traded products
The Australian financial authorities are seeking public opinion on cryptocurrency-based exchange-traded products [ETPs] as demand for these products surges. The Australian Securities and Investment Commission [ASIC] issued a document on Wednesday titled, “crypto-assets as underlying assets for ETPs and other financial products.“
As per the report, the product has varied features and risks that the market participants and product issuers must be aware of. The regulators noted its top priority was to assess the “unique and ever evolving features” of ETPs that could consistently meet the existing regulatory norms.
Noting the complex nature of the product and the changing industry, the regulators deemed it important to consult, especially to assess important issues at stake. The document outlined them as:
“(a) whether these products can meet existing expectations for ETPs, including whether crypto-assets are appropriate underlying assets, whether crypto-assets can be reliably priced, and how crypto-assets should be classified with respect to underlying asset rules; and (b) how product issuers can ensure these products are compliant with our regulatory framework, including with respect to custody, risk management and disclosure.”
Apart from detailing concerns, ASICs also indicated that it did not consider all crypto assets were capable to serve as underlying assets for an ETP. However, it was open to approving a crypto asset that could meet all its relevant criteria for assessment.