Can Ether Pass up Bitcoin?
Will the Price of Ether Rise Over the Price of Bitcoin?
Probably not. The issue is supply and demand. Bitcoin has a limited supply of 21 Million by 2140; Ethereum mints 18 million Ether every year. Currently there are roughly 18,528,000 BTC in circulation and 113,196,000 Ether in circulation or a ratio of about 6.1 Ethereum for 1 Bitcoin. For Ether to equal the same price as BTC it would need 6.1 times the demand of Bitcoin (which is hard to measure). And that is the ratio for today; in 5 years the ratio will be closer to 11:1. As long as the demand for BTC remains steady Ether will never catch up.
Marketcap
The “flippening*” could happen but it will take a long time and Ethereum has a lot of competitors. In theory, if the value of Bitcoin and Ether remain static Ethereum’s market cap will surpass Bitcoin’s in about 30 years because of Ethereum’s increasing supply. In practice, the uncapped supply does not promise Ethereum anything.
What is needed for Ethereum to beat Bitcoin? Mass Adoption. If enough people demand Ether it would eventually beat out Bitcoin. For Ethereum to flip the apple cart we would need to see atleast 6.1 times more Ethereum users join the network and Bitcoin remain stagnant. What challenges does Ether face?
Scalability. Right now Ethereum struggles to handle the users it already has. If 6.1x more users suddenly joined the network would die.
User friendly. People who are not computer literate are scared of cryptocurrency.
Killer App. For Ethereum to grow like wild fire it needs a “killer app” (or several apps) that will drive millions of new users to it’s chain.
Speed. I think this falls into the category of scalability but I want to emphasize Ethereum’s scaling problem. Depending network congestion it can take anywhere from 30 minutes to 3 days to send ERC 20 Tokens or Ether over the network. Crypto weirdos like me put up with it because we believe in the movement and the future of the technology. The average user will throw their computer out the window, curse everyone out, and then rage quit.
So if Ethereum manages to do all of this while Bitcoin remains stagnant it surpass Bitcoin. Realistically, Bitcoin has continued to update and new people to cryptocurrency tend to adopt it first; Ethereum will have to do even more to pass up Bitcoin. Most likely, it will need to run in the background of several popular computer games and financial software in such a way that most people don’t even know they are using it. At that point Ethereum will surpass Bitcoin; provided of course that something else like Cardano or Casper doesn’t pass up Ethereum first.
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*The flippening refers to the idea that Ethereum becomes Number 1 on Cryptocurrency Prices, Charts And Market Capitalizations | CoinMarketCap and Bitcoin becomes number 2.