“ETH/BTC most important chart in crypto at the moment,” says Crypto Cobain, a long time bitcoin and crypto trader whose 2014 IRC own twitter shilling has now got him half a million followers.
“The ETH/BTC chart looks insane,” says DonAlt whom we’re less familiar with, but seems to be right often enough to get 350,000 twitter followers.
They’re talking about the above pictured chart. It looks a bit like bitcoin’s chart last year, or eth’s. Big boom, big bust, dead cat bounce, then down and down until a floor of 0.02 bitcoin per eth.
That long straight line at the floor, finally gives way to a mini bull run as the ratio rises to 0.07. There’s maybe a giant cup and handle here, with that 0.07 new line holding.
Hot, they say, because presumably they think there might be another bull run. Is it true? Can it be? Well, no one dares mention the flippening anymore, but the wind might be changing.
JP Morgan has come out to say eth is a better investment than bitcoin. Boo JP Morgan was the response, ree banksters.
“Bitcoin AUM fell 9.5% to $48.7bn in November, its largest month-on-month pullback since July. Meanwhile, Ethereum and other cryptocurrency products saw their AUM rise 5.4% to $16.6bn and 10.4% to $2.6bn, respectively,” says Cryptocompare in their latest report.
Eth has also been holding better than bitcoin recently, showing some strength. It has far more complex dynamics than BTC because it has ecosystems within it.
Defi has been in a bear market. As that might mean defi tokens get turned into eth, it might be good for eth. The summer 2020 defi bull was also good for eth because presumably new fiat entered the ecosystem and eventually made its way to the network that runs that ecosystem.
Now we have NFTs too. They’re not quite in a bear but not full on bull either. Again new fiat comes in or you price in the ERC20 tokenization of these NFT collections.
That’s utility. A million eth has been burned and probably about 80% of it is because of defi and NFTs. Thus some might argue eth has more causes for demand and more avenues for growth in such demand.
We wouldn’t argue it because bitcoin and eth are different. Bitcoin has more of the ‘spirit,’ is more ideological, and has the certainty in that you can expect bitcoin to work pretty much the same in a decade as now.
Eth is transitioning to Proof of Stake, which for some can be a minus as it’s a big change, but there are environmental pluses and from an investment perspective big pluses in issuance reduction to the point of deflationary as well as a plus in reaching certainty in regards to its monetary policy that most likely won’t change any further after the Merger without some extremely good reasons.
Eth is also transitioning to zk tech. This is a compression method that turns 1 onchain transaction into 1,000 or even 10,000 actual account changes or transactions practically.
Starknet said the show would start this month, but will develop in the coming weeks and months as these solutions roll out and we see how they actually work.
It’s a sink or swim moment. If they nail it, there’s a huge advantage over bitcoin which can’t do zk tech with the focus then turning towards welcoming the mainstream in usage.
If it’s not a satisfactory solution for many potential reasons, then we may get a different sort of flippening. Some pruning blockchain that either forces eth and bitcoin to adopt pruning as both dev teams know how to do, or this third blockchain will flip them.
Because seven years on since the blocksize debate began, we’re coming to its conclusion based on facts, experiments, and evidence. People thus will decide based on that conclusion.
What it is, remains unknown currently but soon we’ll find out. Once we do, then it will be more appropriate to talk about a potential flippening or a different flippening.
Going by some dapps that use zk tech, there’s some optimism, which the chart might be reflecting and if that optimism is justified, then these two traders may be proven correct.
Waiting for such confirmation however is usually way too late for traders, so they’re presumably trying to price in and what they’re pricing in is the real chance that ethereum could become a serious contender to lead the crypto show, which would require just a doubling of the ratio.
But, bitcoin remains 2x bigger and so it would take some time for eth even if it manages to solve the scalability trilemma.