[ad_1]
All eyes are on Ethereum’s coming Merge – is ETH the next #1 token?
While Bitcoin and Ethereum came onto the crypto scene with different purposes, there is constant competition between the two largest coins and Ethereum never wins.
But the second-largest digital currency is close to its notable milestone – the Merge, which can not only transform its monetary policy but also rearrange its position in the cryptocurrency leaderboard.
The Merge Opens Up A Chance For Power Shift
Many started to envision a shift of power when the Merge succeeds.
In an interview with Cointelegraph, Vivek Raman, an Ethereum researcher, said that the upcoming important upgrade is a chance for Ethereum to outperform Bitcoin. According to the researcher, the decisive factor is the effect of the supply shock.
To wit,
“Ethereum does have, just from an economic perspective and because of the effect of the supply shock, a chance to flip Bitcoin.”
The principal distinction between Ethereum and Bitcoin is their envisioned application and underlying technology.
Ethereum was created in 2013 with the intention of serving as a platform for smart contract development, whereas Bitcoin was created with the main goal of serving as a means of payment and a store of value.
Another distinction between these two cryptocurrencies can be found in their total supply. While the supply of Bitcoin is limited to 21 million coins, the supply of Ethereum is unlimited.
A New System is Coming
In the beginning, the two had shared a common type of consensus protocol called Proof-of-Work (PoW) until Ethereum decided to transition the algorithm from PoW to PoS (Proof-of-Stake), allowing users to lock the number of coins they hold and receive interest.
This major upgrade is called the Merge.
The long-awaited Merge is aimed at helping the Ethereum network operate with less energy and improve transaction speed. This is seen as an alternative to Bitcoin’s previous PoW mechanism and will increase its competitiveness with emerging digital tokens.
Although Bitcoin and Ethereum – the two leading cryptocurrencies in the world – both have technical improvements, Ethereum seems to be having a more competitive advantage, threatening Bitcoin’s throne.
If Bitcoin is considered digital gold, Ethereum is more appreciated for its growth potential thanks to its smart contract platform.
Raman also pointed out that Ethereum will be deflationary after the Merge and Ethereum adoption likely accelerates since the DeFi sector significantly relies on the role of this blockchain.
Expect The Unexpected
The Federal Open Market Committee, which is set for July 27, takes the spotlight this week. It is one of the most important events, with impacts ranging from stocks and gold to cryptocurrency.
If the Merge is a chance for Ethereum, the results of the FED meeting in the middle of the week, followed by GDP growth data on Thursday, may take that chance away.
In the meantime, it looks like readiness is around the corner. Interest rates are a sure bet, especially now that the US inflation rate has reportedly risen to 9.1%.
In addition, top corporations will release a series of reports, totaling more than a third of 500 S&P companies. Microsoft and Apple, the two largest US corporations, will release earnings reports on July 26 and 28, respectively.
Alphabet, Google’s parent company, announced the results on the 26th, followed by Amazon on the 28th.
This week, the cryptocurrency market became extremely volatile. Ethereum’s outperformance over Bitcoin is a far cry, as the two coins’ crypto price correlation remains, and Ethereum most likely follows Bitcoin in reaction to macroeconomic events.
Bitcoin fell 3.7% early this week. The top cryptocurrency dropped from a high of $22,580 to a low of $21,750. Ethereum’s price also declined by 5%. The coin is trading at around $1,513 at press time.
[ad_2]
Source link
