Do You Remember The Previous Cycle?
If you were involved in Crypto back in 2017 and early 2018, you will remember that something quite significant took place. Ethereum came very close to flipping BTC and laying hold of the Crypto crown. However, it was not the case, as alts began to shed their gains in 2018. BTC reached its peak in December of 2017, while alts continued on into 2018 before the crash triggered. Had alts continued to rally a little longer, the outcome could perhaps have been different.
Currently, we are well into this cycle and the price action is once again suggesting that ETH could realistically flip BTC.
Current Market Cap
The market cap of BTC is currently over $1 trillion, which was last seen in May of this year. As seen in the screenshot below, the actual market cap at the time of writing is $1,115,633,232,323!
ETH on the other hand is really not that far off, as it is almost at the half a trillion-dollar mark! At the time of writing the ETH market cap is $446,190,048,825.
If you are familiar with altcoin price appreciation against BTC in a bull market, you will understand that this is not really much of an ask at all. From this metric alone, it is extremely likely that this scenario plays out this year, or in early 2022!
Development On The Ethereum Network
Since the early days of Ethereum, the network has seen some significant upgrades and developments. These developments have mostly taken place quite recently and though most likely priced into the current Ethereum price, I believe they still have a bullish effect on the price.
The most significant being EIP-1559, which went live on the 5th of August this year. What makes this upgrade so important is that it actually changes Ethereum’s monetary policy. EIP-1559 incorporates the burning of the base fee, which creates a deflationary dynamic.
ETH 2.0 staking also has a quite a significant amount of ETH locked up in the staking protocol and pools. There is currently almost 7% of the current supply locked in the ETH 2.0 staking protocol.
All of these dynamics begin to work in unison and eventually cause the price to rise. There is obviously a lot of excitement in regards to ETH being the base layer of a new economy, as well as DeFi and NFTs.
Don’t Be Shocked
At the end of the day there is a lot going on for ETH and if you wake up one morning only to find ETH at the number 1 spot, you shouldn’t be that surprised. It may well happen during this bull market. However, if the market is met with another significant crash, it would probably be a short lived victory. I guess we will have to wait and see. Just remember that it is a strong possibility that should be factored in.