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October 24 2021 6:18 AM ˚

Ethereum is starting its independence

Ethereum
(Photo: CNBC Fast Money)
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I've been active in the cryptocurrency space for the past nine years and never in my journey have I witnessed a negative correlation between Bitcoin and Ethereum.اضافة اعلان

To those that don't know, Bitcoin is the world's first and most popular blockchain project and is considered to be the benchmark currency in the crypto market. Ethereum on the second hand is and has always been the second most popular yet much more sophisticated, much more transparent, and much more absorbing of technical talents.

Since their inception, the cryptocurrency markets have moved in one direction — following that of Bitcoin. In other words, when Bitcoin prices go up, the rest of the cryptocurrencies follow and that's predominantly due to the fact that the highest liquidity in the crypto markets is in Bitcoin and the fact that it is the base currency for all crypto transactions. However, this all seems to be changing.

Having been fortunate enough to follow the developments in crypto evolution since one used to read white papers and research initial coin offerings before throwing money into underdog blockchain start-ups, it was evident that Ethereum was much more practical and scalable than Bitcoin.

At a very early stage, around five years ago, many were calling for Ethereum to be announced as the blockchain that would impact all our lives by disrupting every industry with innovative smart control technology (a self executing contract that is in digital form).

Ethereum truly allowed content creators, influencers, and their fan bases and supporters to transact one-to-one directly without the need for a third party like SoundCloud, Instagram, or Apple's App Store. It was all made possible through decentralized applications (or dapps), which remove the need for a store to mediate transactions between creators and buyers. The store would be run by an algorithm containing self-executing rules, terms, and conditions rather than company policies and human intervention.

Ethereum has long been overshadowed by Bitcoin due to the latter’s immense popularity and its first-mover advantage. Ethereum, however, has always had a more realistic use case that is far more scalable and impactful to both businesses and societies than Bitcoin ever did.

One of the crypto space’s early theories was that Bitcoin would be the gold of the internet, while Ethereum would be its silver — a more industrial asset with greater use cases. I believe we’re already seeing this theory play out, as both Bitcoin and Ethereum have begun exhibiting price actions incredibly similar to those of gold and silver. Gold takes the slow and steady approach of 10-year price cycles, in which gold’s price will move in one direction for a decade before trending in the opposite direction. Silver is more cyclical and impulsive in both its price rallies and crashed.



(Photo: CNBC Fast Money)

We are beginning to notice negative correlations between Bitcoin and Ethereum, where when one goes up the other goes down — an early sign of independence for Ethereum and a reduction of influence (correlation) between both currencies.

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