Forex in this article
• Bitcoin remains the largest cryptocurrency
• 2022 very mixed for crypto enthusiasts
• Analysts see opportunities for Bitcoin sister Ethereum
A turbulent year in the cryptoverse is over. The year 2022 presented great challenges for digital currency enthusiasts. There was a sharp correction immediately after Bitcoin set a new record high of just under $70,000 in late 2021, then the collapse of the algorithmic stablecoin Terra/LUNA sent shockwaves throughout the crypto sector and resulted in the first insolvencies. The gloomy market environment made the recovery difficult, the scandal surrounding the bankrupt crypto exchange FTX did the rest to further destabilize the crypto sector.
Ethereum Merger 2022
However, there was not all bad news in 2022. The second largest cryptocurrency by market capitalization, Ethereum, experienced the long-awaited merger in September, where the blockchain switched from the energy-intensive proof-of-work to proof-of-stake process, which significantly reduces energy requirements. of the cyber currency and the inflation rate. However, the hoped-for drive for the price of the cryptocurrency Ether did not materialize after the merger.
Analysts see opportunities for Ethereum
But what is the outlook for 2023 for the two crypto giants Bitcoin and Ethereum? So far, the original cyber currency BTC has always been able to assert itself at the top of all digital currencies in terms of market capitalization. Bitcoin is also the clear winner when looking at the respective highs for the two currencies, namely US$68,789.63 for Bitcoin and US$4,891.70 for Ether. However, due to the many possible uses of the Ethereum blockchain, which has proven to be a major factor in decentralized finance (DeFi), this trend may be reversed in the foreseeable future. At least that’s the conclusion of various analysts.
For example, self-confessed Bitcoin bull and Bloomberg analyst Mike McGlone. As Cryptonews reports, he recently predicted that Ethereum would overtake Bitcoin in the next bull market, as Ether has outperformed its big brother in relative terms since 2021.
Bitcoin crosses the series; Ethereum may be the top contender to continue to outperform the first-born crypto –#Ethereums progress vs. #Bitcoin have been steadfast in 2022 deflation in most risky assets and can gain underpinnings. pic.twitter.com/mLRMO4vpQr
– Mike McGlone (@mikemcglone11) 20 December 2022
The price ratio between Ethereum and Bitcoin has increased, sometimes less, but continuously since the beginning of 2021, the last crypto bull market. According to McGlone, this trend should continue during the next bull market.
As Velvet Capital explains, according to Cryptonews, the merger has also made Ethereum more efficient and scalable. By switching to the proof-of-stake process, Ether is also on the path to becoming deflationary, which is becoming more and more apparent as the cryptocurrency becomes more widely used.
#Ethereum becomes deflationary when the token burn rate (from transaction fees) is greater than the stake reward for validators
PoS ETH has only been around for a few months
In the next bull run, ETH may become even more deflationary with more people using Crypto regularly pic.twitter.com/Edpq0jrZR7
– Velvet.Capital (@Velvet_Capital) 21 December 2022
According to The Daily Hodl, anonymous crypto strategist Smart Contracter, known by his pseudonym, also believes that the time has come for Ethereum during the next bull market.
yeh bro it’s still in an uptrend for several years, defo want to be in to see it turn btc in the next cycle
— Bluntz (@SmartContracter) 12 December 2022
In the short term, he also sees Ethereum breaking the resistance around $1,300. However, it remains to be seen whether the cryptocurrency will actually succeed in replacing Bitcoin as the largest digital currency in 2023.
Image sources: Sorapop Udomsri / shutterstock.com, Wit Olszewski / Shutterstock.com