Ethereum is under pressure: Since switching to Proof-of-Stake, the cryptocurrency has not only lost massive market share but also significantly depreciated in value compared to Bitcoin. While Bitcoin is expanding its dominance, Ethereum’s “flippening” seems a distant prospect. What does this mean for the future of the second-largest cryptocurrency?
Ethereum Loses Market Share and Fights Against Bitcoin
The Ethereum blockchain‘s transition to the Proof-of-Stake (PoS) model in September 2022, known as “The Merge,” was intended to usher in a new era for Ethereum. The goal was to reduce energy consumption and position Ethereum as a deflationary asset. However, the results have been disappointing. The value of Ethereum (ETH) relative to Bitcoin (BTC) has since fallen from 0.074 BTC to 0.022 BTC, a decline of 70%.
Ethereum’s market dominance has also suffered significantly. While ETH accounted for 17.7% of the total cryptocurrency market capitalization at the time of the merger, this share has now fallen to just 8%. During the same period, Bitcoin’s dominance rose from 37.6% to 58.9%. The so-called “flippening,” in which Ethereum was supposed to overtake Bitcoin in market capitalization, has become a distant prospect. Ethereum now needs a 7.3x rally to overtake Bitcoin, compared to a 2.3x rally in 2022.
“Ethereum’s performance is lagging behind expectations, especially compared to Bitcoin,” according to the analysis by Cryptodnes.bg.
Summary: Ethereum has suffered significant losses in market share and relative to Bitcoin since switching to PoS. Bitcoin’s dominance continues to grow, while Ethereum’s “flippening” is becoming increasingly unlikely.
Bitcoin price threatens to fall to $65,000
The Bitcoin (BTC) price is volatile, currently hovering around $83,000. Over the weekend, the price fell to a low of $81,600 but has recovered slightly. Analysts such as Peter Brandt are skeptical about the stability of current levels and predict a possible drop to $65,000. Brandt points to a price chart that indicates another low is imminent.
A large-scale trader, jokingly nicknamed “Spoofy the Whale,” is accused of manipulating the market. Using so-called “spoofing” tactics, he is exploiting liquidity to suppress the price and prevent it from rising above $87,500. Despite these short-term uncertainties, the long-term outlook for Bitcoin remains optimistic.
“Manipulation by large-scale traders highlights the challenges facing the crypto markets, but over the long term, Bitcoin remains a strong asset,” says Keith Alan of Material Indicators.
Summary: The Bitcoin price is under pressure from market manipulation and could fall to $65,000. However, the long-term outlook remains positive.
Bitcoin bull market not over yet, according to Arthur Hayes
Arthur Hayes, founder of BitMEX, remains optimistic about Bitcoin and does not see the end of the bull market yet. In an interview, he stated that Bitcoin could rise to as much as $1 million due to global monetary expansion. Alternatively, $666,000 or $500,000 could also be realistic targets. Hayes emphasizes that Bitcoin’s price performance is increasingly influenced by global liquidity and less by the traditional four-year cycle.
The Bitcoin halving, which occurs every four years, has become less important, according to Hayes. Instead, monetary policy is the determining factor for future price increases. Hayes expects lending in the financial system to gain new momentum, which could further boost Bitcoin.
“We’re going to see some crazy things when it comes to the pace of money creation,” Hayes says.
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