While Ethereum was turned out with the marking of being “The World Computer” fit for doing successfully whatever could be coded, the undertaking seemingly didn’t have a stellar use case as of not long ago.
All through Ethereum’s soonest years — particularly in 2017 and 2018 — one of the essential uses for the blockchain was to go about as a stage for beginning coin contributions. That is to state, business people attempting to turn into the following Satoshi Nakamoto and Vitalik Buterin were utilizing Ethereum to sell their own digital currency.
Adequately, giving tokens, decentralized betting applications, and CryptoKitties were all the blockchain brought to the table. CryptoKitties were common to the point that it turned into the first ETH-based application to truly obstruct the system, as the BBC detailed and Etherscan information authenticates.
Regardless of the restricted use cases, the digital money despite everything figured out how to turn into the world’s best-performing resources, mobilizing 28,000 percent from dollars to around $1,400 over the 13 months from January 2017 to the mid 2018 pinnacle.
It was such a strong rally that at one point in 2017, there were analysts expecting the market capitalization of ETH to flip that of Bitcoin. Fittingly, this event was dubbed the “flippening.”
Impressive, for sure, but a top industry chief executive has argued that Ethereum has an even “higher ceiling” to rally towards this time around, this bull run around.
The reason: the project actually has a solid use case now, and that is decentralized finance, better known as “DeFi.”
Introduction of DeFi bodes well for Ethereum, analyst says
While just two years ago, stablecoins and decentralized finance were not a prominent trend on Ethereum, they have become two use cases core to the blockchain over the past 12 months.
According to Ryan Selkis, chief executive of crypto researcher and data provider Messari, this development, along with the development of this crypto sector in the future, gives “ETH a higher ceiling” to rally towards in the long run. Whether this was in reference to Ethereum’s performance against the dollar or against Bitcoin isn’t clear.
Selkis’ comment somewhat contradicts that of Ryan Watkins, a researcher at his company who suggested in April that the invasion of Ethereum by Tether’s USDT and other centralized stablecoins may pose a long-term “threat” to ETH’s monetary premium.
Watkins wrote at the time in reference to how stablecoins could become the primary form of money on the Ethereum network as opposed to ETH:
“For ETH to defend its monetary premium, Ethereum must create demand for trust minimized applications that use it as collateral. ETH must not devolve into its naive early branding of digital oil.”
That said, the cryptocurrency does have its own scarcity mechanisms enabled by DeFi that is likely leading Selkis to have his bullish skew.
Bitcoin’s time to shine
Selkis asserted that the propagation of DeFi and stablecoins bolsters ETH’s long-term prospects. But as he and many other analysts have admitted, it’s time for Bitcoin — and primarily Bitcoin — to shine over altcoins. As the Messari CEO put it best:
“[The] digital gold narrative will lead in this climate.”
In a report titled “Bloomberg Crypto Outlook: Bitcoin Demand Exceeding Supply,” which CryptoSlate reported on previously, Bloomberg analyst Mike McGlone indicated that the ongoing macroeconomic environment will “sustain the first-born crypto’s performance versus its brethren.”
After all, Bitcoin is the only investable cryptocurrency that has safe-haven characteristics, the most notable of which being its 21 million coin supply cap enforced by halvings.
Raoul Pal — a former Goldman Sachs executive and the current chief executive of Real Vision — corroborated the sentiment that Bitcoin will outperform for now. The Wall Street veteran indicated in a number of recent interviews that if you truly believe cryptocurrency is the future, Bitcoin is automatically the most reliable bet, with Pal branding BTC the “call option” on a decentralized and digital economy.
Ethereum, currently ranked #2 by market cap, is up 6.02% over the past 24 hours. ETH has a market cap of $23.77B with a 24 hour volume of $17.7B.