Ethereum Futures More Popular Than Bitcoin Among Major Investors
BTC has been the largest cryptocurrency for a long time, and this is primarily because it was the first one to be developed. More recently, investors have been moving away from BTC and towards Ethereum, which has proven to be more innovative.
BTC futures have been trading at a price that is lower than the current price of the cryptocurrency. In normal conditions, well-performing assets trade at lower prices compared to the futures prices, and this is because the assets need to be stored at a cost. Also, the investors expect to make profits on the future price of the assets.
Background of BTC
BTC was developed in 2009, and this means it was the first cryptocurrency to be released. In its initial years, the coin was almost valueless, and any growth recorded would be minimal. In more recent years, the price of BTC has increased significantly because of corporate investment in the coin.
Also, figures like Elon Musk have helped to boost the popularity of the cryptocurrency. In 2021, Musk even started accepting BTC in exchange for Tesla vehicles, and this raised the price of the cryptocurrency to new highs.
Why is BTC Becoming Less Popular Now?
There are many factors that have hurt the price of BTC in recent months. One of these is the fact that Elon Musk no longer accepts BTC in exchange for Tesla vehicles, and this has damaged the image of the currency.
Also, the fact that mining Bitcoin takes a lot of power has turned many investors away from the cryptocurrency. This is especially a concern since the impacts of climate change are already being experienced in various parts of the world.
History of Ethereum
The white paper of Ethereum was published in 2013 by Vitalik Buterin, and the altcoin would be launched two years later. The technology allows anyone to deploy permanent decentralized applications, and users can interact with the apps.
For a long time, Ethereum has been the second most popular cryptocurrency after Bitcoin. At the moment, it has a value of about $3,377.89. In comparison, BTC is trading at a price of $49,497.60.
Ethereum is Better for Transactions
One factor which has helped to boost the value of Ethereum is the fact that it can be used practically as a currency. At the moment, Bitcoin transactions are extremely slow and expensive, which is why the cryptocurrency has been considered a good store of value.
Using it to buy and sell goods and services is quite inconvenient. It is also worth noting that these transactions consume a lot of energy.
On the other hand, Ethereum has come up with a series of upgrades that will result in the formation of Ethereum 2.0. This will make transactions faster, cheaper, and a lot more secure. Since the proof of work system will be abandoned for proof of stake systems, the energy consumption will also go down significantly.
Decentralised Apps (dApps)
Another reason for the increased price of Ethereum futures is that it has expanded its service and can now be used for building decentralized apps. This is done on the Ethereum blockchain.
The platform is also used to create non-fungible tokens (NFTs). More cryptocurrencies have since created programmable blockchains, but most decentralised applications are still developed on Ethereum.
Decentralised Finance (DeFi)
One of the key applications of Ethereum is decentralized finance (DeFi). This is a blockchain-based form of finance that doesn’t rely on traditional financial intermediaries such as exchanges, banks, and brokerages.
Instead of such intermediaries, the system uses smart contracts. Decentralised finance allows users to lend and borrow money from each other. Investors can also use decentralized finance to speculate the price movements on a range of assets.
With the increased popularity of DeFi, the value of Ethereum is set to go up significantly.
Can Ethereum Go Down?
In May 2021, Ethereum had gone up to a price of slightly over $4,000. This rapid increase in price was primarily triggered by the value increase of Bitcoin, and this was further triggered by the decision by Tesla to sell cars for Bitcoin. As soon as Tesla reversed this decision, the price of Bitcoin and Ethereum went down. By the end of May 2021, the price had gone down to $2,400.
The question most investors have is whether the price of the altcoin can go down again. The price of Ethereum futures is unlikely to drop significantly since the reasons for the current price increase are solid and backed by innovation. However, like all other cryptocurrencies, it can experience price changes every now and then.
In the long term, it is expected that the price will keep rising. You should still take note of factors that can make the price of Ethereum futures plummet as they can help you decide when to sell the assets. Here are some of the factors to look out for:
- Government regulation
- Competition from other cryptocurrencies
- The reliability of cryptocurrency exchanges
- Adoption by users, major investors, and corporations
Ethereum is managed by a team of highly innovative individuals, and this is why major investors believe that it will become even more useful over time. This is another reason for the popular Ethereum futures.
Which Currencies Pose Direct Competition to Ethereum?
All cryptocurrencies offer high levels of privacy when making transactions, and this was one of the main selling points of Bitcoin. Also, they allow people to transact without involving any traditional financial institutions.
Although all cryptocurrencies fulfil these conditions, most of them are unlikely to ever pose serious competition to Ethereum. In reality, most are not even developed as competitors to Ethereum. Let’s look at the main currencies posing competition to ETH.
Cardano is one of the biggest altcoins today, and it is also growing extremely fast. This altcoin was developed specifically to compete against Ethereum, and it offers the benefit of being environmentally friendly.
The coin was launched in 2017 and currently has a market cap of $71.08 billion. It is currently trading at a price of $2.22 and has a circulating supply of $32.04 billion. In comparison, Ethereum is currently trading at a price of about $3,377.89, and it has a market cap of slightly over $401 billion.
A major factor that makes Cardano a primary competitor of ETH is the fact that it has the functionality of a smart contract.
Users can develop decentralized apps on the Cardano blockchain, but it has not yet been able to catch up with ETH. The developers of Cardano want to develop the system to handle a million transactions in a second, and this will further give it an edge over ETH.
Polkadot has been referred to as the Ethereum killer by major investors, and this is because it offers a service that is extremely similar to that of ETH. The genesis block of the cryptocurrency was released in May 2020 as a Proof of Authority network.
In a little more than a year, the altcoin has already risen to become the ninth most popular cryptocurrency. It has a market cap of $30.98 billion and has a circulating supply of 987.58 million. Its current price is $31.40.
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Ethereum futures have become more popular than BTC, and this is because the altcoin has more applications. If you are interested in getting free ETH trading signals, you should create a free account at XOSignals.
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