ETH to BTC prediction: Will post-Merge Ethereum rise to challenge Bitcoin domination?

ETH to BTC prediction: Will post-Merge Ethereum rise to challenge Bitcoin domination?

Bitcoin (BTC), the crypto market pioneer, is, by market capitalisation, twice the size of ethereum (ETH), the second largest coin. Will ETH eclipse BTH following successful completion of The Merge that saw it switch to the proof-of-stake (PoS) consensus mechanism?

Here we take a look at the ETH to BTC exchange rate, and what factors are shaping ETH/BTC in 2022 and beyond.

What is ETH/BTC?

ETH/BTC represents the exchange rate between ether, the Ethereum blockchain’s native coin, and bitcoin, the native coin on the Bitcoin Network.

ETH/BTC represents how many bitcoins can be bought for one ether, with the rise in ETH/BTC signifying either a rise in ETH or fall in BTC, and vice-versa.

BTC was meant to be “a purely peer-to-peer version of electronic cash”. However, over the years the cryptocurrency has also become a store of value and a comparison to gold as a hedge against rising inflation.

Bitcoin mining relies on a blockchain that connects all public transactions. Using a proof-of-work (PoW) consensus, BTC miners compete against one another to solve mathematical equations and confirm the legitimacy of transactions. They are rewarded in BTC tokens.

In order to reduce the rate at which new BTCs are given as rewards, the cryptocurrency was designed to undergo halving events roughly every four years. A halving reduces the number of bitcoins released into circulation by half, limiting supply.

Ethereum, a programmable network for building decentralised applications (dApps), was launched in 2015, and was inspired by bitcoin’s limitations.

“While Bitcoin is only a payment network, Ethereum is more like a marketplace of financial services, games, social networks and other apps that respect your privacy and cannot censor you,” Ethereum’s website says.

Another key element of Ethereum is the blockchain’s ability to run smart contracts – computer programmes on the blockchain that allow for the creation and smooth running of dApps.

Just like BTC, ETH initially used a PoW mechanism, but since 15 September 2022 relies on PoS. The change became known as ‘The Merge’, and was designed to reduce Ethereum’s energy consumption by around 99.95%.

The Merge is one of a series of upgrades. In a July presentation, the platform’s co-founder, Vitalik Bouterin, named the following development stages, but did not specify when they will happen:

  • The Surge – the addition of Ethereum sharding, which will lower the cost of bundle transactions and make operating easier.
  • The Verge – users will be able to become validators without having to store large amounts of data.
  • The Purge – will simplify the Ethereum protocol and cut down on the amount of space the blockchain uses.
  • The Splurge – this upgrade includes “all of the other fun stuff”.

These updates also have potential to affect the ETH price  shaping the ETH to BTC exchange rate.

ETH to BTC historical rate chart

The ETH to BTC exchange rate surged by 2,518% in the first two years after the pair started trading, from 0.005767BTC in August 2015 to the all-time high of 0.151BTC in June 2017, signifying the quicker rise in ether’s price.

However, this peak in the ETH to BTC price chart did not last long. The exchange rate fell to 0.02427BTC in December 2017 – down 83.9% since the June peak.ETH to BTC exchange rate, 2015 - 2022

The ETH value reached $1,396.42 in January 2018, and the ETH to BTC rate jumped to 0.09724 BTC.

ETH to USD exchange rate, 2015 - 2022

ETH managed to uphold its positive trend against BTC for the next three weeks as the price chart gained 16% more, peaking at 0.1131BTC on 1 February 2018.

ETH to BTC performed fairly well for the duration of 2021, peaking in mid-May at 0.08178BTC, when the ETH price reached $4,168.7 and BTC was trading at $50,000.

The ETH/BTC pairing was not hugely affected when the BTC value reached its all-time high of $66,971.83 in November 2021, It did peak in December 2021 at 0.0879BTC after briefly falling to 0.06034BTC on 19 October 2021.

BTC to USD exchange rate, 2015 - 2022

Following the collapse of the TerraUSD (UST) stablecoin and its sister token LUNA and the wider crypto crash that followed, the ETH to BTC exchange rate fell by nearly 30% from 0.07554BTC in May 2022 to 0.05373BTC in July, indicating a faster decline of ETH price.

ETH’s price dipped to as low as $993 in June, with BTC slumping to $19,017 amid the bearish sentiment in the cryptocurrency world sparked by LUNA collapse and tightening monetary policy.

Ether rose  to 0.0846BTC in September 2022 in anticipation of The Merge. The current exchange rate stood at 0.07088 BTC, as of 20 September.

Is The Merge driving ETH/BTC?

On 15 September Ethereum successfully upgraded its system from PoW to PoS after a six-year build-up. However, the ETH price did not rally as much as investors were anticipating.

Anndy Lian, chief digital advisor at the Mongolian Productivity Organisation and author of NFT: From Zero to Hero. noted that right after The Merge, the price swung above $1,640 and fell shortly after:

“This is very much expected. There was much influx of ETH into various exchanges since the 12th and then building up to around 1.8 million ETH before the completion. In this case, I see that investors could be planning to sell off before the price fell.”

Lars Seier Christensen, chairman of the Concordium Foundation and founder of Saxo Bank, said that the Ethereum community anticipated a “much more positive reaction to the successful Merge”. He added that the recent rally was what in TradFi we call “buy the rumour, sell the fact” and that whoever saw The Merge as upbeat news had already bought ETH.

“Merge is really a non-event. It changes nothing in terms of scalability or fees, and actually antagonises a number of long-term Ethereum supporters – the miners,” he added.

Eugene Zomchak, CoinLoan’s head of product, told Capital.com that the value of ETH to BTC is likely affected by other microeconomic factors such as the cryptowinter and the Fed’s policy tightening than The Merge, noting:

“There are some positive forecasts coming in from enthusiasts who note that the Merge was a landmark event and the price of ether could surge by two, three and even five times.”

Since The Merge, the BTC price has been fluctuating between $19,000 and $20,000. ETH reached $1,469.74 on 17 September before falling to around $1,300, as of 20 September.

Lian stressed that it is important investors remind themselves that the effects of The Merge, possibly including the ETH to BTC price, will only be felt in the long-term:

“The gas fees will remain the same, and other scalability issues are still unsolved. The community at large must wait for Surge, Verge, Purge, and Splurge improvements to see a reduction in transaction costs and boost scalability significantly.”

Concordium Foundation’s Christensen also noted that the current market environment is challenging:

“The correlation to broader asset markets is very clear, and if stocks don’t recover, this will add to negative sentiment. If Ethereum goes decisively below 1,400, I think we could see a significant sell-off.”

Christensen added that the next Ethereum upgrades will be in focus:

“The most important thing is increased scalability, which will reduce fees. Until that happens, Ethereum is in effect not much use, and entirely reliant on Layer 2 solutions that provide much less security than Ethereum itself.
“Considering how difficult the Merge has been to execute, with years of delay, my personal belief that Ethereum can deliver the next stages in a speedy fashion is limited. Ethereum has one advantage and one advantage only: a very loyal ecosystem that will go through the most extraordinary and irrational hurdles, just to stay loyal. I wonder how long that will last.”

ETH/BTC exchange rate forecasts

Based on its analysis of past price performance as of 20 September, algorithm-based forecasting service Wallet Investor predicted that ETH/USD could trade at $2,391.383 in 2023 and reach $7,135.056 by 2027.

In terms of bitcoin prediction, the site saw BTC/USD trade at $33,668.92 in 2023 and reach $79,969.28 by 2027.

While Wallet Investor did not provide a direct ETH/BTC exchange rate forecast, the data suggests that they expected the rate to be 0.335BTC in 2023 and 0.421BTC in 2027.

DigitalCoinPrice supported a positive ETH/USD forecast, as of 20 September, and expected the coin to grow to $1,832.85 by the end of 2022, $3,032.72 in 2023 and $5,417.40 in 2025. Its long-term prediction saw the token surge past $18,000 in 2030.

The site also gave an upbeat BTC/USD forecast, expecting the coin to grow to $27,580.79 by the end of 2022, $41,874.03 in 2023 and $76,453.11 by 2025, passing $264,000 in 2030.

DigitalCoinPrice expected the rate to be 0.0665BTC by the end of 2022, 0.0724BTC in 2023, 0.708BTC  by 2025 and 0.068BTC by 2030.

Note that forecasts and analysts’ expectations shouldn’t be used as a substitute for your own research. Always conduct your own due diligence and rely on your own projections. And never trade money you cannot afford to lose.

 

Source: https://capital.com/eth-btc-prediction-ethereum-bitcoin-merge-domination

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j

Are we heading for a post-Terra crypto winter?

Are we heading for a post-Terra crypto winter?

Terra’s LUNA and UST implosion is dragging down an already ailing market. What do other developments suggest about crypto’s long-term future?

The Terra crash has doubled down on people’s fears that the sharp downturn in the crypto market, much like the steep rise in U.S. inflation, isn’t transitory but could be longer-lasting.

Led by Bitcoin’s fall from grace, down from its spectacular US$69,000 high in November 2021 down to US$33,000 in January this year, crypto commentators were already noting the first signs of a “crypto winter.” But the final nails in the coffin now include record-busting inflation rates in the U.S., a Federal Reserve getting serious by raising interest rates, and the risk of recession after the tapering off the trillions of dollars injected into the economy.

And it’s not just Bitcoin with its seventh red candle week in a row. Ethereum is also currently down around 58% from its all-time high, and altcoins are down around 80% in value. It’s not a pretty picture, made even worse by the US$40 billion flash crash of LUNA and TerraUSD, which had, “a domino effect on the rest of the cryptocurrency market, tanking the price of Bitcoin and accelerating the loss of $300 billion in value across the crypto economy.” To cap it off, total value locked (TVL) in decentralized finance (DeFi) dropped last week to US$56 billion, according to industry monitor DeFi Pulse, and even NFTs dropped 65% after the Terra fiasco. Overall crypto markets lost a total of US$1 trillion in April.

But if this is the start of another market cycle, dramatized by Terra, there is plenty that marks it as different from previous downturns, not least that the regulatory attention on the crypto industry that was already in motion will be accelerated. “Standing between broad-based mainstream adoption of crypto infrastructure for commerce and financial applications at a global scale is this regulatory clarity,” Circle CEO Jeremy Allaire told Yahoo Money. “We have the impetus to see that happen now.”

Just as importantly, countries around the world aren’t suddenly going to row back on their engagement with the crypto and blockchain space. Indeed, news that South Korean regulators are investigating Terra may in the longer run help to strengthen plans for crypto-friendly legislation promised by the incoming new president.

Another sign that long-term crypto adoption is moving forward is confirmed by the British government, which says it is planning to regulate crypto, including allowing stablecoins to be a form of payment, as part of its bid to turn the nation into a global crypto hub. It’s therefore excellent timing for Coinbase to launch a global crypto think tank to help mold policy debate about the industry.

Another key player, venture capital firm Andreessen Horowitz (a16z), in its first State of Crypto Report stated that we are now in the middle of the fourth “price innovation” cycle. Which in plain English means that despite the current market downturn, the hard work in the background with development will lead to innovation and growth in the longer term and the start of a new cycle. “Whereas prices are often a lagging indicator of performance in some industries, in crypto they are a leading indicator,” wrote the authors of the a16z report. “Prices are a hook. The numbers drive interest, which drives ideas and activity, which in turn drives innovation.”

While the euphoric tone of the Bitcoin 2022 conference in Miami in early April may seem a distant memory right now, the news from Jack Mallers, CEO of Strike, advancing their Lightning Network-based solution is significant. The integration of the Strike wallet with major online players in the U.S. economy aligns with Satoshi’s vision of Bitcoin as a payment system rather than a store of value. It’s also worth noting the Lighting Network-related news from ex-Diem head David Marcus, in the midst of the Terra events on May 12, to launch a new company, Lightspark: “Downturns are good moments to focus on building and creating value with mission-aligned people.” Despite FTX CEO Sam Bankman-Fried’s criticism of Bitcoin for payments, this has scope to offer an exciting integration with fiat money that could be the major development to come out of the current downturn.

In the meantime, while we can only guess at the depth of the crypto downturn, it’s clear that the same basic tenets of investing remain — that retail investors in particular should only get involved with a clear plan in mind. They should only invest what they can afford to lose and be careful with the inherent volatility of crypto assets, and not invest too much as part of their overall portfolio. Part of what made the Terra crash so shocking was that it drew in crypto newcomers who were confident, in part thanks to the high level of prominent venture capitalists investing in the startup and its stablecoin product. But sometimes, as we learned with the 2008 financial market crash, what appears to be the safest assets on the surface can prove to be the riskiest.

However, it’s the long-term investments in the crypto industry that will make the real difference. With recent news that banking pillars like Goldman Sachs are investing in the space, to Meta’s plans to process digital asset payments and investments, a clear difference between the last downturn and this one is the level of institutional and governmental adoption.

 

 

Original Source: https://finance.yahoo.com/news/heading-post-terra-crypto-winter-030200028.html

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j

Are we heading for a post-Terra crypto winter?

Are we heading for a post-Terra crypto winter?

Terra’s LUNA and UST implosion is dragging down an already ailing market. What do other developments suggest about crypto’s long-term future?

The Terra crash has doubled down on people’s fears that the sharp downturn in the crypto market, much like the steep rise in U.S. inflation, isn’t transitory but could be longer-lasting.

Led by Bitcoin’s fall from grace, down from its spectacular US$69,000 high in November 2021 down to US$33,000 in January this year, crypto commentators were already noting the first signs of a “crypto winter.” But the final nails in the coffin now include record-busting inflation rates in the U.S., a Federal Reserve getting serious by raising interest rates, and the risk of recession after the tapering off the trillions of dollars injected into the economy.

And it’s not just Bitcoin with its seventh red candle week in a row. Ethereum is also currently down around 58% from its all-time high, and altcoins are down around 80% in value. It’s not a pretty picture, made even worse by the US$40 billion flash crash of LUNA and TerraUSD, which had, “a domino effect on the rest of the cryptocurrency market, tanking the price of Bitcoin and accelerating the loss of $300 billion in value across the crypto economy.” To cap it off, total value locked (TVL) in decentralized finance (DeFi) dropped last week to US$56 billion, according to industry monitor DeFi Pulse, and even NFTs dropped 65% after the Terra fiasco. Overall crypto markets lost a total of US$1 trillion in April.

But if this is the start of another market cycle, dramatized by Terra, there is plenty that marks it as different from previous downturns, not least that the regulatory attention on the crypto industry that was already in motion will be accelerated. “Standing between broad-based mainstream adoption of crypto infrastructure for commerce and financial applications at a global scale is this regulatory clarity,” Circle CEO Jeremy Allaire told Yahoo Money. “We have the impetus to see that happen now.”

Just as importantly, countries around the world aren’t suddenly going to row back on their engagement with the crypto and blockchain space. Indeed, news that South Korean regulators are investigating Terra may in the longer run help to strengthen plans for crypto-friendly legislation promised by the incoming new president.

Another sign that long-term crypto adoption is moving forward is confirmed by the British government, which says it is planning to regulate crypto, including allowing stablecoins to be a form of payment, as part of its bid to turn the nation into a global crypto hub. It’s therefore excellent timing for Coinbase to launch a global crypto think tank to help mold policy debate about the industry.

Another key player, venture capital firm Andreessen Horowitz (a16z), in its first State of Crypto Report stated that we are now in the middle of the fourth “price innovation” cycle. Which in plain English means that despite the current market downturn, the hard work in the background with development will lead to innovation and growth in the longer term and the start of a new cycle. “Whereas prices are often a lagging indicator of performance in some industries, in crypto they are a leading indicator,” wrote the authors of the a16z report. “Prices are a hook. The numbers drive interest, which drives ideas and activity, which in turn drives innovation.”

While the euphoric tone of the Bitcoin 2022 conference in Miami in early April may seem a distant memory right now, the news from Jack Mallers, CEO of Strike, advancing their Lightning Network-based solution is significant. The integration of the Strike wallet with major online players in the U.S. economy aligns with Satoshi’s vision of Bitcoin as a payment system rather than a store of value. It’s also worth noting the Lighting Network-related news from ex-Diem head David Marcus, in the midst of the Terra events on May 12, to launch a new company, Lightspark: “Downturns are good moments to focus on building and creating value with mission-aligned people.” Despite FTX CEO Sam Bankman-Fried’s criticism of Bitcoin for payments, this has scope to offer an exciting integration with fiat money that could be the major development to come out of the current downturn.

In the meantime, while we can only guess at the depth of the crypto downturn, it’s clear that the same basic tenets of investing remain — that retail investors in particular should only get involved with a clear plan in mind. They should only invest what they can afford to lose and be careful with the inherent volatility of crypto assets, and not invest too much as part of their overall portfolio. Part of what made the Terra crash so shocking was that it drew in crypto newcomers who were confident, in part thanks to the high level of prominent venture capitalists investing in the startup and its stablecoin product. But sometimes, as we learned with the 2008 financial market crash, what appears to be the safest assets on the surface can prove to be the riskiest.

However, it’s the long-term investments in the crypto industry that will make the real difference. With recent news that banking pillars like Goldman Sachs are investing in the space, to Meta’s plans to process digital asset payments and investments, a clear difference between the last downturn and this one is the level of institutional and governmental adoption.

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j