A good question that often comes to people’s minds in the crypto space is “Will Ethereum Overtake Bitcoin?” A question that pops up once every few months or at least once every year. This question is normal considering Ethereum has been the “runner up” in the crypto ranking for quite some time now.
Ethereum, as the decentralized blockchain network that allows people to create DApps (decentralized applications), has been deemed “superior” than Bitcoin by many crypto enthusiasts. But even though Ethereum is arguably used for wider use cases than Bitcoin, will it ever overtake Bitcoin in the market cap ladder?
The Functions Of Bitcoin – Surpassed by Ethereum
Let’s talk about the very basic fundamentals of these two cryptocurrencies. Bitcoin, when it was launched for the first time, was designed to be the next level “wire transfer” – which means people were hyping it up as a medium to transport money across the border. Yes, unlike wire transfer that could take days, you could easily transfer money within just a few minutes with Bitcoin.
The narrative around Bitcoin had slowly evolved from just a medium of transfer to a “digital gold” and a “store of value”. Yes, since a few years ago, many people started assuming Bitcoin as the new store of value that could surpass the likes of fiat currencies, especially when it comes to long-term prices.
Compared to Bitcoin, Ethereum has actually surpassed these two functions of Bitcoin. Yes, even until today, Ethereum is still deemed as a worthy investment with big potential for the future. Many crypto followers believe that Ethereum would be as big (if not bigger) than Bitcoin thanks to its future transformation to proof-of-stake consensus algorithm.
But, apart from being used to transport money and to be used as a “store of value”, Ethereum also has other functions. Remember that Ethereum was proposed to be used as DApp (decentralized apps), and it seems like Ethereum has started to fulfil its own prophecy. Nowadays, there are many applications that are operating on top of the Ethereum blockchain.
Ethereum’s biggest strength is its smart contract. Unlike Bitcoin, Ethereum is capable of issuing different types of applications (finance, games, and others) through its native utilization of smart contracts. So yes, Ethereum can be used to issue DApps, to be used as a store of value, and for cross-border transactions.
But, Is It Enough To Overtake Bitcoin?
In the above, it has been explained that Ethereum has plenty of use cases that Bitcoin is not able to achieve. However, does it mean that Ethereum will overtake Bitcoin? Unfortunately, it is not that simple. Fundamentally, something with bigger use cases and as many (if not more) active users would surpass something with lesser use cases. But, in reality, it is not always about fundamentals.
Take a look at the stock market. Even when the economy is going down heavily, the stock market has been recovering in the past few weeks. The fundamentals and the price speculation in the stock market could be two different things (although they could be correlated as well).
Unfortunately, this is the problem with the crypto market as well. While fundamentally, Ethereum is able to create smart contracts and DApps, but it won’t mean that much if the big traders or whales refuse to see Ethereum as more valuable than Bitcoin. Yes, the problem with “speculative assets” is that the price is determined by how valuable the said asset is in the eyes of speculative traders.
So, when many whales believe Bitcoin is more expensive and deserves to have a larger market cap than Ethereum, that is exactly what’s going to happen. To convince these same traders otherwise would require more than just Ethereum fundamental technology being superior to Bitcoin.
So, Is There Any Chance For Ethereum To Overtake Bitcoin?
Regarding future price action, nobody knows for sure. It is actually quite possible for Ethereum to eventually overtake Bitcoin by price and market cap if enough traders believe it deserves to go there. The question is, will there be enough whales who believe Ethereum can surpass Bitcoin? Because at the end of the day, everybody thinks differently.
Fundamentally, Ethereum has what it takes to overtake Bitcoin. But, once again, when it comes to market cap ladder, traders often speculate what is supposedly worth more. And as long as their mindset does not change, it will be very hard for Ethereum to overtake Bitcoin in the market cap ladder. But, never say never. You will never know what is going to happen in the next few years. There is a big chance that Ethereum will be valued more by the whales when its use cases have increased as well.