1 day ago · Bitcoin settles above the pivotal $23,, struggles to clear $24, Ethereum bears gain control after the move below $ Ripple has recovered from $, but the situation is still critical. About Ethereum. Ethereum price today is $ USD with a hour trading volume of $15,,, USD. Ethereum is up % in the last 24 hours. The current CoinMarketCap ranking is #2, with a market cap of $69,,, USD. 19 hours ago · ‘Bitcoin and Ethereum Have Gone Completely Separate Directions,’ Feat. Bully Esq. One of crypto twitter’s best-known personalities discusses DeFi, bitcoin .
Bitcoin and ethereum market shareWhy I Invested in Bitcoin and Ethereum | The Motley Fool
In economics, few principles are as basic as the law of supply and demand. Price is determined by how much of something is available supply and how much people want or need it demand. When it comes to cryptocurrencies, supply differs in each case. However, supply is only half of the equation. Remember Beanie Babies? Ty, the company that made them, periodically "retired" certain Beanie Babies, limiting their supply forever.
This limited supply motivated some collectors to buy the toys hand over fist, causing their value to soar in the '90s.
Some even fetched thousands of dollars. However, Beanie Babies prices quickly plummeted after their brief heyday -- most still sell for a fraction of what they sold for in the '90s.
But supply hasn't changed; they still don't make the discontinued ones. Demand changed. People don't want them as much anymore, so they're worth less. Many cryptocurrencies have known supplies. That's extremely useful. But an educated opinion of future token value requires a prediction for future demand.
Thinking through both supply and demand led me to buy an equal amount of bitcoin and Ether over the thousands of other options. In my opinion, they're the two most likely cryptocurrency candidates to be in demand going forward and the ones I would buy today but more on that in a bit.
I bought Ether because the Ethereum blockchain has real-world utility. While tokens can be used for digital payments, more practical things like smart contracts and applications can be built on top of the Ethereum blockchain. Think of it like a tank of gas. Sure, the tank of gas has value. But it also has a practical use. Continuing this analogy, some cryptocurrencies are just tanks of gas in engine-less worlds.
But Ethereum's blockchain is a gas-powered engine. Ethereum isn't the only blockchain network like this, but it's arguably the best known. That's important because blockchain networks benefit from a network effect.
In other words, the more people use one system, the more likely it is more people will use the system. To me, if people were going to build upon existing blockchain technology, Ethereum is surely among the top candidates. Many businesses already see the value of using blockchain technology. And some, like DocuSign , are already building upon the Ethereum blockchain. To execute a transaction on the blockchain, you're charged a fee in Ether.
As more real-world applications are powered by the Ethereum blockchain, there will likely be an increasing demand for Ether to make it run. Bitcoin has less utility than Ethereum, but that hasn't stopped it from maintaining its title as the most valuable cryptocurrency in the world. Some believe it could become a one-world currency, creating extremely high demand. But to me, that sounds far-fetched.
People don't seem to be using bitcoin for transactions but rather as a growth investment or as a digital store of value. In my opinion, bitcoin's demand as a store of value is far less than what it would be as a currency or some other everyday utility. That said, bitcoin's upside could still be great given its supply is far more limited than that of Ether. Consider there can only ever be 21 million bitcoin tokens. By contrast, Ether and many others have no ultimate ceiling.
Ether has annual mining limits, which keeps new supply somewhat in check. But bitcoin's mining process is even more limited. Every time there's a transaction on the bitcoin network, decentralized computers process it and the fastest computer is rewarded with new bitcoin tokens.
However, every few years the bitcoin reward is cut in half, most recently in May. This means miners are rewarded with 6. Because there's less bitcoin coming into circulation now, the price of bitcoin could go up if demand remains constant. A surprising development this year is new demand is suddenly pouring in from corporate entities.
But then, last month, the number of Bitcoin locked up in Ethereum began to fall. First, the price of Bitcoin shot up like a rocket. Second, DeFi rewards have been drying up for months. However, the market collapsed when the penny dropped, and the only way for DeFi protocols to prop up the market was to mint an increasing number of tokens to satiate the desires of profit-hungry customers.
Elias Simons, a protocol specialist at blockchain infrastructure firm Bison Trails, echoed the sentiment: "One of the reasons BTC on Ethereum is plateauing, could be a decrease in Defi yield farming activity. In the last couple of weeks, we saw Uniswap end its liquidity mining program, resulting in less compelling yield opportunities available in DeFi for WBTC," he said. Simons added that with Bitcoin price volatility once again on the rise, "higher yields are becoming available in competing ecosystems," such as through basis trading cross-exchange arbitrage, and "even on the funding side of centralized derivatives.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice. Read on the Decrypt App for the best experience.
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