Why Is Ethereum Outshining Bitcoin?

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Last Updated on 10 May 2021 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / jeroen@cryptotips.eu
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With mentions on SNL (by Tesla boss Elon Musk), the Ellen show (where Shark Tank star Mark Cuban promoted Dogecoin) and many other popular television programs around the world, the boom in cryptocurrencies now seems unstoppable.

Bitcoin remains the largest cryptocurrency, but others are catching up, especially Ether. At the beginning of the year, Bitcoin made up about 70% of the total market value of all cryptocurrencies. As we entered May, this share has dropped to just under 40% and altseason officially started.

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Investment mania

Analysts explain this by saying that it is becoming easier and easier for private investors to acquire tokens other than Bitcoin and thus broaden their portfolio, aka diversify it as most American and European investors would. Critics of the cryptosphere on the other hand see this as another part of an investment mania driven by cheap money, stimulus checks and plain old greed. Time will tell who’s right.

Ether, the number two in the crypto business, continues to benefit from the rising interest. In the past 12 months, Ether is up almost 2000% and now costs more than $4,100. The Vitalik Buterin cryptocurrency has clearly outperformed Bitcoin in terms of performance in the current year. The total value of ether is currently about $ 450 billion. Bitcoin’s $ 1,100 billion

Smart contracts and DeFi are the key to success

Like Bitcoin, the Ethereum system is built on a blockchain in which every transaction is publicly recorded. This system allows the exchange of money faster and more cheaply than conventional systems, which require a long chain of middlemen.

But Ethereum can do more than just any other cryptocurrency. Thanks to the Ethereum blockchain, you can also conclude contracts. These so-called smart contracts are internet-based contracts, the terms of which are specified using a programming language. After the contract has been concluded, it is continuously and independently checked whether the previously defined contract condition has occurred. Once that is the case, the other part of the contract is fulfilled.

Furthermore, the fact that Vitalik was the first to comment publicly on the DeFi boom and recognize its possibilities, means that Ethereum can adapt to new market conditions.

This, together with the fact that Ethereum has a figure as its CEO (although he is not very outspoken) and the founder of Bitcoin remains a mystery, might just be the reason why Ethereum is outperforming Bitcoin as of late.

mmaxer / Depositphotos.com