Will Ethereum surpass Bitcoin?
Welcome to the jam: Warner Bros. released more than 90,000 NFTs to promote Space Jam: A New Legacy [Image via Warner Bros.]
If you’ve been following crypto for a while, you might have heard of “the flippening” — slang for Ethereum fans’ long-held conviction that their crypto of choice will eventually become more valuable than Bitcoin. With some big names signing on to the theory, we took a look at the evidence. Also this week: crypto in the Capitol, Wall Street’s latest moves, and Space Jam’s blockbuster NFT promotion. Let’s get into it!
Will ETH outpace BTC?
U.S. politicians on crypto
Wall Street’s biggest crypto moves
Goldman Sachs, Jim Cramer join chorus claiming ETH could one day surpass BTC. Could they be right?
In the world of crypto, Bitcoin is king. But in the years since Ethereum's 2015 arrival, the second-biggest cryptocurrency has been gaining ground via innovations (from DeFi to NFTs) made possible by its smart-contract compatible blockchain — leading fans to claim that ETH could one day overtake BTC in . In crypto slang, this is an event known as . Now, some major analysts are making similar predictions. Is it really a possibility?
Ether "looks like the cryptocurrency with the highest real use potential," , which predicts that ETH’s value could eventually overtake BTC’s. Ethereum’s advantages include the ability to run applications like DeFi protocols. (Goldman also that England would win the Euro 2020 final, so maybe take this with a grain of salt.)
ETH proponents are watching a major upgrade planned for this summer, which they believe will have an impact on prices. Among other changes, the upgrade (called EIP-1559) is designed to reduce the supply of new ETH over time — assuming demand remains constant, prices should rise.
As of Tuesday, ETH’s market cap ($230 billion) is around 37% of BTC’s ($613 billion). But ETH has often surpassed BTC by other key metrics. In June, the . The daily value of Ethereum transactions also regularly exceeds Bitcoin’s. On July 7, for example, ETH $9.4 billion worth of transactions compared to BTC’s $6.7 billion.
Why it matters… Of course, many observers remain skeptical. Bitcoin is more valuable and has been adopted as a gold-like store of wealth by a range of corporate treasuries and Wall Street funds. But popular use cases for Ethereum’s flexible blockchain continue to bubble up (how many people were talking about NFTs a year ago?) — and with emerging technologies anything is possible. Regardless, there’s plenty of room for both ETH and BTC to grow.
As U.S. weighs crypto regulations, what signals are politicians sending?
As the U.S. continues to await crypto regulations from federal agencies like the SEC, some have been cautiously charting their own paths forward. Now, a growing number of politicians are joining the conversation — and disclosing their own digital asset investments. So who is getting involved?
Wyoming Sen. Cynthia Lummis, whose personal holdings include 5 BTC, encourages Americans to buy bitcoin. During a , the Republican lawmaker also praised colleagues in the bipartisan “financial innovation caucus” — which includes Democrats like John Hickenlooper and GOP reps like Marsha Blackburn: “Interesting conversations are occurring among people that are in our caucus with financial regulators… [who are] beginning to grapple with how to make a level playing field.”
Pennsylvania Sen. Pat Toomey disclosed investments in Grayscale ’s Bitcoin and Ethereum trusts, holding between $1,000 and $15,000 worth of each. These followed a letter to Treasury Secretary Janet Yellen, in which the GOP senator that overregulation could “stifle” the crypto industry.
Sen. Elizabeth Warren penned a letter to SEC chairman Gary Gensler, inquiring about the agency’s ability to regulate crypto and decentralized finance (DeFi) platforms. In June, the Democratic lawmaker also raised concerns about crypto’s climate footprint. ( on crypto and the environment.)
Minnesota Rep. Tom Emmer commented on a “generational divide” in Congress. In an interview with , the GOP representative rebuffed colleagues who remain skeptical of crypto, asking, “have you looked to see how big the market is?”
The likely next mayor of New York, Democrat Eric Adams, wants to make the city . Should Adams become mayor, he’d be competing with Miami’s mayor Francis Suarez, who has long sought to attract the crypto industry to his city.
Why it matters… As politicians hone their crypto talking points, the pressure for regulatory agencies to provide legal clarity continues to mount. In a potential sign of federal momentum, the Financial Crimes Enforcement Network (FinCEN) the creation of the Chief Digital Currency Advisor role. However, most eyes remain on the SEC, which has yet to advise on a backlog of crypto ETF applications from Wall Street.
Is Soros buying the Bitcoin dip?
July may be off to a as Bitcoin hovers in the $30,000 range, but that hasn’t stopped some big names from making crypto moves. Earlier this month, Japanese venture giant Softbank $200 million in one of Latin America’s largest crypto exchanges, and Fidelity Digital Assets, the crypto arm of financial services giant Fidelity, is planning to increase headcount by about 70% to meet demand from institutional investors (like hedge funds and corporate treasuries).
Soros Fund Management has and is looking at other cryptocurrencies, according to two sources who spoke to market news site The Street. The fund — which now primarily manages investing giant George Soros’s vast fortune — has already made bets on crypto infrastructure. “There’s a real fear of debasing of fiat currencies,” said CIO Dawn Fitzpatrick in March. “[Bitcoin is] a commodity that’s easily storable, it’s easily transferable… it has a finite amount of supply.”
Bank of America is investing in crypto expertise. The second-largest bank in the U.S., which has been slower to embrace digital assets than some of its peers, just launched a . “Cryptocurrencies... constitute one of the fastest growing emerging technology ecosystems,” said Candace Browning, head of global research for Bank of America, in an internal memo.
Space Jam NFTs blow up, Woz calls BTC a “miracle”
Diamond hands… Sotheby’s accepted payment in an unspecified cryptocurrency for a 101.38-carat diamond that sold for $12.3 million. The auction house, which now accepts both BTC and ETH, the development “a significant moment in the evolution of the market.”
Token squad… To promote the Space Jam sequel with Lebron James, Warner Bros. more than 90,000 free and inexpensive NFT virtual trading cards. Jeff Marsilio, CEO of the Nifty’s platform that hosts the collection, compares it to a “Willy Wonka experience. You might get lucky and get a rare NFT.”
What is CeFi?
An alternative to DeFi and TradFi that provides some benefits of both
A term that is short for centralized finance
A way to earn yield on crypto savings
All of the above
Find the answer below.
All of the above