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Is Ethereum at the Forefront of the Crypto Market?

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Ethereum on bitcoin
Image Credit: Kabiru Yusuf

In recent times, the word on the crypto market has been that Ethereum might surpass Bitcoin as the world’s leading coin. Popular names like Goldman Sachs have reported that Ethereum could overtake Bitcoin as the dominant cryptocurrency. Other popular names have also seconded this notion, with Todd Morley, a crypto and blockchain investor, stating that he thinks Ethereum has “much higher utility” than bitcoin, and is “where the action is.” 

Analysts have gone further to state that ETH could rise by 40% against BTC. This analogy came to be after the June 27th, 2021 rock-bottom of 0.0552 BTC, by 21.28%. It revealed that most traders have chosen to sell their Bitcoin assets to seek opportunities in the Ethereum market recently. Following this analogy, Ethereum has already surged by more than 160% against Bitcoin. 

Owing to imminent scantiness in Ethereum and price stability in Bitcoin, investors and traders see huge prospects in the Ethereum market. Ethereum’s poor supply in dissemination (due to its price increase) against growing requests would make it more appreciated than it is today. Currently, Ether has a market cap of $233.77 billion. The decentralized finance market, which is mostly built in line with Ethereum, saw an amassed profit of 9% on July 4th, 2021. The total market value of Decentralized Finance market coins is $75.7 billion, as seen on CoinGecko data. 

While the price of ETH is still some substantial reach from BTC, the distance is reducing and Ethereum’s hold is jammed with the kind of supply Bitcoin did not have at the same point in time. Analyst Simon Peters believes that Ethereum has what it takes to become the dominant store of value, however, it will take a few years. Bitcoin and Ethereum have often run on similar interests that elucidate the confused faces of many traders across the world.

Lately, Ethereum has been drifting into another path, working on building considerable development away from Bitcoin’s pace. Simon Peters added that it is also key to remember that Bitcoin had a six-year head start. He said, “If you look at where the market cap of Bitcoin was six years ago it was approximately $5 billion, whereas Ethereum at a similar point in terms of its life cycle has a market cap of $300billion.” 

In retrospect, investors and traders will be looking at which coin has the most room for growth and potential. Ethereum is making moves to address its financial scheme with the forthcoming release of the EIP 1559 Ethereum Improvement Proposal). According to Abdelhamid Bakhta, one of the six authors of the EIP 1559, he said the main purpose of this development is to achieve block elasticity which would mean that the capacity of the platform is doubled. 

Several analysts claimed Ethereum’s next stop would be around $3,000 and once that mark is hit, the mark of $5,000 would be within reasonable reach over the coming months. Popular opinion shows that most analysts believe that Ethereum will overtake Bitcoin eventually, however, there are still words of caution. Susannah Streeter, senior investment and market analyst was quick to state that although Ethereum has made great strides in recent times, its future direction is far from certain. She went further to say that traders should be careful about getting caught up with the news surrounding Ethereum, as it is still a bet.

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Bitcoin

Bitcoin.org gets hacked, scammers run BTC giveaway scam

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Earlier today, Bitcoin.org, the oldest cryptocurrency website registered by the founder of Bitcoin, Satoshi Nakamoto, recently got hacked. Scammers ran a BTC giveaway scam with a promise to return double the amount users send to the named address. In the end, the scammers were reported to have collected $17,764 before the website was taken down. The website was inaccessible for a few hours after the incident, but normal service has been resumed.

To bring users’ attention to the hack, a pseudo-anonymous Twitter account with the name Cobra took to Twitter to reveal the news and claimed that the website may be offline for some days. He also clarified through his tweets that Bitcoin.org has never been hacked and that the breach must have been due to a lapse on the part of Cloudflare- the web provider that the website is hosted on.

“Bitcoin.org hasn’t been hacked, ever. We move to Cloudflare, and two months later we get hacked. Can you explain where you were routing my traffic too? Because my actual server didn’t get any traffic during the hack” he tweeted.

The scam on the website was perpetrated through a giveaway. Visitors on the website were greeted with a popup, asking them to send crypto to a Bitcoin wallet via a QR code and receive double the amount in return. The fake message showed that the Bitcoin Foundation was giving back to the community and that the giveaway will be limited to the first 10,000 people. This was made to draw more people into the scam.   According to an analysis on the scam address done by Reddit Sleuth, it was presumed that a chunk of the 0.4BTC came from the scammers themselves to add an element of credibility to the claim. At the time of writing this report, Bitcoin.org is once again, back to life.

How popular is the Bitcoin giveaway scam?

Bitcoin giveaway scam is quite popular among hackers as it allows them to make fast money without tampering with anyone’s wallet. In 2020, Twitter handles of top crypto celebrities, politicians and influencers were hacked to run Bitcoin giveaways. While the scammers were apprehended, the value of Bitcoin was not affected.

Today’s scam on Bitcoin.org did not affect the price of the coin either. Despite the Evergrande debt crisis and the fluctuations bedevilling the crypto market within the week, Bitcoin increased by 2.05% within the last 24 hours, thereby moving from $42,789 to $44,378.

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Crypto prices drop as global market fear increases

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Top cryptocurrency prices have fallen amidst a drop in stocks and fears over China’s Evergrande debt crisis. In the last 24hour, Bitcoin dropped from $47,772 to $42,630 shedding about 8.58%. this is the lowest in price since another bull run began on Sept 5 after the April crash.

El- Salvador’s President, Nayib Bukele sees the fall as an opportunity to invest more. Recall that the country adopted Bitcoin as a legal tender on September 7. Despite the adoption, the price of Bitcoin has fallen by almost 14% since then.

Other coins have experienced dramatic crashes within the last 24hours. Solana, a coin that has experienced 355% growth within the last 3 months fell from $162 to $130 shedding about 11.39% within the last 24hours. Solana’s fall may be categorized by the 17-hour outage which the founder, Anatoly Yakovenko said was caused by bots “flooding the networks”

Ethereum fell by 9.37% while Dogecoin and Axie Infinity fell by 11.22% and 14.14% respectively within the last 24hrs hours. While crypto experiences dark Monday, El-Salvador keeps investing more money in Bitcoin.

A look at the global market

The global market is experiencing fear due to the Evergrande debt crisis. A report published by the University of Michigan shows that consumer’s sentiment is beginning to decline. This trend alone may impact the crypto market as well.

On the other hand, the global market downturn must have been spurred by the Evergrande debt crisis. The company grew to be one of China’s biggest companies by borrowing more than $300bn. Last year, Beijing made rules to control the debt owed by big real estate developers. This led Evergrande to offer its properties at major discounts to raise more money to keep the business afloat. Right now, the company is struggling to meet the interest on payment of debts.

Why would it matter if Evergrande fails?

The collapse of the multi-million dollars company would affect the global market; including the crypto market. Many people bought properties from Evergrande and they expect to make gains. If Evergrande falls, crypto investors will be forced to withdraw more money to keep their business running without the means to invest more. When one business fails, the other gets affected indirectly. This also applies to other firms that do businesses with Evergrande.

The potential impact on China’s financial system is another effect of Evergrande’s fall. In his statement to BBC, Mattie Berkink, the Economist Intelligence Unit (EIU), said that “the financial fallout would be far-reaching. Evergrande reportedly owes money to around 171 domestic banks 121 other financial firms” if the company fails, other lenders or businesses may be forced to lend less. Thereby leading to a credit crunch- a situation where companies struggle to borrow money.

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El Salvador’s Bitcoin adoption – What you need to know

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El Salvador made history (and headlines) after becoming the first nation to endorse and approve the world’s most popular cryptocurrency, Bitcoin, as a legal tender. The move makes Bitcoin acceptable for transactions within the Central American country alongside the U.S dollar, which has been serving as the paper currency since 2001. This comes after the so-called “Bitcoin Law” came into force after passing legislation in June of 2021. El Salvador’s government announced that it had purchased 400 Bitcoin in 2 tranches of 200 each and plans to get more in the future.

The move to adopt Bitcoin has been justified by the government’s need to boost financial inclusion in the country. It is estimated that 70% of El Salvadorans do not have access to financial services and the government believes that Bitcoin can help close the gap. The Bank of America has outlined a few benefits that they believe will result from El Salvador’s bitcoin adoption. These include promotion of financial digitization, streamlining remittances as well as opening the country to digital currency miners. However, not all agree that the move is a step in the right direction.

Amongst the detractors of the scheme are the International Monetary Fund and the World Bank, each having warned El Salvador about the risks of Bitcoin’s use as legal tender. The World Bank has been irked by what it described as “environmental and transparency shortcomings” with bitcoin, while the IMF cited “economic and legal concerns” in relation to the move.

Other than the push back from these international bodies, there has been some internal opposition to the adoption of Bitcoin. Citizens had held protests over Bitcoin’s adoption in August and about 67.9% of respondents in a poll said they disagreed with the government’s decision to adopt crypto. The results of the poll showed that 8 in 10 people had little confidence in the use of bitcoin as the currency.

In spite of the criticism, El Salvador’s government is moving forward and has reportedly installed 200 Bitcoin ATMs across the country. And in response to the World Bank’s environmental concerns, El Salvador’s president, Nayib Bukele, has said the country plans to power mining activities using renewable energy from the country’s volcanoes. In order to incentivize the use of Bitcoin in the country, any citizen who signs up for the country’s “Chivo” wallet will get 30$ worth of bitcoin.

All in all, the adoption of a cryptocurrency by a sovereign nation is seen as a testing ground for many, as this is a use case Bitcoin has never experienced in its 12-year history. Countries such as Brazil and Panama seem to be watching the move to draw insights on whether to follow suit.

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