Ethereum to Replace Bitcoin, Reach $ 18,000 in 2021?

The following is an opinion piece on the direction of cryptocurrency in 2021. In accordance with our editorial policy, we would like to remind you that cryptocurrencies are highly volatile assets and whilst it’s interesting to speculate on their future price direction, cyptoassets are not investment-grade and you should only invest what you can afford to lose.

Even a public comment or post from a renowned personality or organization is enough to bring a storm in the world of crypto. This is the reason for the recent crash in Bitcoin and other cryptocurrencies. This electrifying crash wipes out $1.3 trillion from the combined crypto market price.

You might be wondering why this wiping is so huge?

Well, cryptocurrency is circulating widely around the world. Since the time people start accepting bitcoin for business, or they start receiving bitcoin as payment they become more vulnerable to crypto volatility. So when any statement comes from banking giants like Goldman Sachs, this is a big deal.

Ethereum coins

You might be wondering what that particular statement is?

“Ethereum will replace Bitcoin in first place in the coming years and is expected to reach $18,000 in 2021”

Yes, you heard it right. This is a dramatic announcement from Forbes which is leaked from a Goldman Sachs market analysis.

Although Bitcoin is currently the largest virtual currency and is more than twice as big as Ethereum, it is facing a threat from Ethereum. This can be evident from the fact this gap has been narrowed down by about $350 billion in the month of May alone.

Well if we go with the fans of Ether they cite its popularity for blockchain-based financial services and digital collectibles. They also give credit to an ongoing upgrade.

If we go with Tegan Kline (co-founder of the blockchain software company Edge & Node), Ether can exceed Bitcoin soon in the feature. It is so because Ethereum will be superior in terms of innovation and developer interest, and this view is supported by many cryptocurrency book authors.

Moreover, If we go with Cathie Wood (strategist and star investor of Goldman Sachs Group Inc.) she is in favor of the statement that Ether has incredible potential. Moreover, when it comes to virtual currencies, they have expanded a lot beyond Bitcoin in the past few years. Even if we go with the facts from CoinGecko, the shares of Bitcoin have gone down to 42% from 70% going into 2021.

Other commodity strategists from Goldman Mikhail Sprogis and Jeff Currie wrote that Bitcoins’ first-mover advantage appears “fragile”. They further add that the chance is high Bitcoin will eventually lose its crown as another cryptocurrency with greater practical use and technological agility will run it down.

They further added that when it comes to competitors that hold the power to make this happen Ether is likely to be the candidate.

Ethereum large coin

Why Ethereum is the most suitable candidate?

Bitcoin is down to about 37% in the month of May. On the other hand, Ether has only shred about 11%. Although we can consider this crash after Elon Musk criticized Bitcoin over its energy profile. But still, there are some more facts that are speaking loudly in favor of Ethereum. Ether has gone up more than 300% over the past year whereas Bitcoin is able to climb 275% only. This is enough to get an idea that Ethereum is expected to reach $ 18,000 in 2021.

On the other hand, if we go with the Goldman Sachs report. Ethereum is the second-largest cryptocurrency. It carries a market capitalization of around $250 billion as compared to bitcoins that holds $660 billion. But the statement that attracts the attention of the crypto community is regarding the high chances of Ethereum overtaking Bitcoin as a dominant store of value. It is further called the Amazon of information.

Moreover, Ethereum has been able to surge over the last year because of the soaring popularity of decentralized finance. The cryptocurrency technology will help to recreate traditional financial instruments. These instruments can be loans and interests.

The ecosystem used by Ethereum is capable of supporting smart contracts. It also provides a way to create new applications on its platform.

This is not the end as Goldman Sachs analyst further wrote “Most Decentralized Finance (DeFi) applications are being built on Ethereum network, and most non-fungible tokens (NFTs) issued are purchased using ether. The greater number of transactions in ether versus bitcoin reflects this dominance”.

Moreover, according to Kosala Hemachandra (chief executive of MyEther Wallet) “Ethereum is not just a value token, it actually fuels all use cases built on top of the ETH blockchain”. On the other hand, Bitcoin is a value token with no clear roadmap.

Over the last 1 year, the price of Ethereum has outpaced the price of bitcoin. Ethereum has been able to add around 1000% as compared to Bitcoin which stands at 300%.

Conclusion: 

The problems for bitcoin don’t seem to end as it faces two repetitive crashes. One after Elon Musk’s tweet and now after leakage of another dramatic announcement from Forbes. Whatever it is, both Bitcoin and Ethereum are having their own pros and cons. So let’s see who wins the race in 2021.