Over the past few months, Ethereum has been getting hammered on social media, saying that it’s dead. It’s just old tech, and Bitcoin will continue to outperform. The big question is though, is there any truth to these claims? Is Ethereum dead? Or is it going to surprise a lot of people and once again massively outperform Bitcoin?
And so this article is going to be my big prediction for Ethereum this year, why I believe there’s going to be a big rotation back to Ethereum with some shocking moves to the upside. Now, this is going to be quite comprehensive, and we’ll cover what’s been going on with Ethereum so far this year, then what’s happened in the past in the previous Bitcoin halving?
Yeah, so we might see what is coming next. And then we’ll finish with the institution, aka big money; where will they be investing in bitcoin or Ethereum? Okay, so first up is a theory of just old tech and dead and out of Bitcoin and Ethereum, which is going to reign supreme this year.
And so the first place we’re going to start is what has happened so far this year, as we’ve just started in January. So, we’re looking at the bitcoins chart in US dollars.
And we can see a huge run-up right up to the ETF launch, where they shot up and made a high, and then right on ETF day, there was a massive sell-off, and in my last article, I was talking about holding the line and however, it highlights that at the start of this year, Bitcoin has not done very well.
In fact, if you look at Bitcoin dominance, which is the percentage of the crypto market is in Bitcoin, this was the launch of the Bitcoin ETF.
And after a mega mega run-up, it shows that dominance got absolutely squashed back down. But because this is a percentage of the crypto market, it means there was a beneficiary.
So on Bitcoins, big day, when Bitcoin got squashed, who was the one that benefited? Wow, this is the Ethereum Bitcoin chart. And this was Bitcoin ETF launch day. And it was, in fact, an Ethereum that stole the day and stole the limelight of Bitcoin. The big rotation already happened in January. And since then, we’ve now got sideways consolidation.
So just basing it off so far this year, you’d have to say that the rotation has already begun. But that’s so far this year. But what about the rest of the year? Well, we can look at the past and see what it did in the last Bitcoin having year.
So looking at the quarterly returns, and this time, we’re going to see what Bitcoin has done in the past and what Ethereum has done in the past. And again, we’ll see are we likely to see the big rotation continue. So I’ve highlighted the halving years.
So obviously, this year is a halving year, as well as 2020 and 2016. But I would make the case that anything from 2016 and further back is not really that useful, as there was just such a small amount of money taking part in crypto, and very, very few people. So for me, this data isn’t very useful. So it means we only really have one data point to look at, but one is better than nothing.
So the last halving year in q1, which is where we are at right now, it suggests that Bitcoin is going to struggle last time it was minus 10%. And so far, that is also playing out, but he’s saying that q2 Right at the time of the halving is going to be very good, 40%, followed by 20%, followed by a huge q4 170%. And remember, these are the two big bull market years. So then going into the next year, 100% q1, which is great, very large pullback q2, but then followed by a good q3 and an okay q4 Before the dreaded, readier now looking at Ethereum.
Now, Ethereum wasn’t even born in 2016 here. So again, just taking it for the halving year, like for like, it says that q1 is going to be better for Ethereum than it was for Bitcoin is says that q2, the rotation is going to continue a 70% gain versus a 40%, then a massive Q three 60% gain versus the 20%. But then Bitcoin did get a better q4, then going into the next year, Ethereum absolutely crushed it 160%, no down quarter for Ethereum, up 20%, 30%, 22%.
So, looking at the quarterly data, it seems to me that the money is going to likely keep rotating into Ethereum. And it will outperform Bitcoin. So that was the quarters, but we can also look at annually.
So, taking a look at the crypto market on an annual basis,the year we were looking at was 2020. So starting with Bitcoin, and in 2020, for the entire halving year was about a 300% gain, not too shabby at all. So remember 300%. And when we compare it to Ethereum, 2020, like for like, last time Ethereum did almost 500%. So 300 versus 500.
So annually, it seems that eath, again, will be outperforming this year, and then just out of curiosity, let’s look at the big year, which potentially is coming 2025, which is the year after and for Bitcoin, this opened and closed, giving a 60% return. So 60% versus a theory AIIMS looks like a big 120 25 could potentially be up to 400%.
So again, annually, Ethereum. Looking at what happened in the last cycle, it outperformed in the harvest year and massively outperformed the year after.
So now we move on to the big Ethereum killers. We’ve all heard so many opinions, theories, and articles about these killers.
So this is very serious business; we need to take a look at Ethereum and see if it has been killed. Is it even going to survive this next cycle of this year? And next? Well, let’s start with a big-picture overview of the Ethereum network. And this is Ethereum’s unique address. And here, to me, it doesn’t say anything is being killed. In fact, that is a beautiful chart up to right now, withover 250 million unique addresses.
So, nothing killed them. So if Ethereum were being killed, then surely the developers would be migrating away from Ethereum as no one wants to sit on a sinking ship, right? Well, these are the full-time developers right now inthe top 10 ecosystems. And what do we see? Ethereum is number one. So the smart money, the developers are choosing Ethereum three times the size as the next one. And not just that polygon but also Ethereum. So, another 800 developers they’re arbitrary. Also, Ethereum has another 600 developers there, and optimism also Ethereum has another 400 developers there, so nothing is beingkilled here.
And in fact, it’s dominating most of the developers. Moving on to staking we know that Ethereum went from proof of work to proof of stake, which manypeople had deposited onto the beacon chain and locked their eath away. But when the merge happened, and it went over to proof of stake,people can now unstick and get their Ethereum back. So indeed, if Ethereum is going to be killed, we should see a significant drop in the Ethereum being staked and the number of validators dropping. And what do we see? It just keeps going up?
There are more staked Ethereum and validators right now than what happened at the merge. So more of these 10s of millions of supply is being locked away, nothing being killed here. Now, when we look at the app store, this is the decentralized application now beingchained as dominating here with over 5000 applications. gents, and coming in number two is Ethereum with four and a half 1000 applications, so very strong, considering just number three drops off to 1300. And then it goes into the hundreds. So, nothing is being killed there, either.
Now, last time we looked at Defi, I pointed out that not only is Ethereum number one and dominant, butit was five of the top 10 chains. Well, there has since been an update, as now this is the top 10 And. Ethereum is number one, it’s number four, it’s number six number seven is number nine, and number 10. So it’s now six of the top 10. It is so absolutely crushing, and it’s only getting stronger. Now, the downside is that if some hefty regulation hits defy, it willhit Ethereum and others very, very hard. But it’s a good problem to have nothing being killed there, either.
Okay, now we move on to the big money, the institutions now with retail investors like myself, and most of you listening here, we really care about prices going up, right? Institutions do care about price, but they alsocare about three things. Number one is energy usage. So, we have the World Economic Forum Meeting in Davos right now. And top of the agenda is climate change and carbon emissions. So there area lot of big people that care about energy usage.
And I’m sure everyone has probably seen this. And it’s just that Bitcoin, in comparison to Ethereum,uses way more energy, the difference between the Burj Khalifa and just a tiny little screw. So institutions will look at the energy usage between Bitcoin and Ethereum. And there’s only one clear winner. Number two, again, retail investors don’t really care too much about staking; if you’re staking $1,000, or even $100,000.03, and a half percent is okay, but it’s not life-changing. However, when you’re an institution, and you’ve got $100 million, then three and a half percent becomes very attractive.
And this is something that Ethereum can give institutions that Bitcoin can’t. Number threeis all about the supply. One of the massive benefits that people keep talking about is Bitcoin is demanding money, and it will eventually cap out at 21 million. But until then, it’s been growing at 1.68%. And when you compare this to Ethereum, Ethereum has a diminishing supply.
With this activity and the Ethereum being burnt, the supply of Ethereum is shrinking. And this is going to be a compellingnarrative as well. Okay, and to finish up with the institution’s. I’ve got two small clips. The first one is the CEO of Blackrock and his thoughts on Ethereum. Then, we’ll finish with the CEO of JP Morgan and his thoughts on Bitcoin and chains like Ethereum.
In the longterm, do you now expect other cryptocurrency ETFs? Do you think that Gary will talk to him later, Gary will have to approve an Ethereum ETF? And is that a function of something the SEC has to do? Or do you think that all these things have to go to court first,
I couldn’t respond that I see value in having an Ethereum ETF. As I said, these are start stepping stones towards tokenization. And I do believe this is where we’re going to be going. We have the technology to tokenize today; if you want to talk about it, think about this: if you had a tokenized security and you have a tokenized identity, you Andrew, the moment you buy or sell an instrument, it is known it’s on a general ledger, that is all created together.
It wants to talk about issues around money laundering, and all this eliminates all corruption by having a tokenized system of cryptocurrencies in two types. There’s a cryptocurrency that might actually do something. Think of a cryptocurrency that has embedded smart contracts with it.
Then, we can use it to buy and sell real estate and move data that may have value in the idea of tokenizing things that you do something with. And then there’s one that does nothing. I call it the pet rock to Bitcoin or something like that. And so on the Bitcoin, you know, there’s, I’m not trying to make a joke here, there are use cases AML fraud, anti-money laundering, tax avoidance, sex trafficking, those are real use cases. And you see it being used for hundreds, maybe 50 or 100 billion dollars a year. That is the end-use case.
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