DAN: Ether’s poor week has prompted a research firm to reverse its outlook, favoring Bitcoin instead. The firm, which specializes in cryptocurrency research, had previously been bullish on Ether, but has now changed its stance. The reversal comes after a week of losses for Ether, which saw its price drop from $2,400 to $1,800. The firm cited a lack of institutional interest in Ether as the primary reason for its reversal.
The firm noted that Bitcoin has seen a surge in institutional interest, with major companies such as Microstrategy and Square investing heavily in the cryptocurrency. This has led to a surge in Bitcoin’s price, which has risen from $10,000 to $60,000 in the past year. The firm believes that this institutional interest will continue to drive Bitcoin’s price higher, while Ether’s price will remain stagnant.
The firm also noted that Ethereum’s network fees have been rising, making it more expensive to use the network. This has caused some users to switch to other networks, such as Binance Smart Chain, which has lower fees. The firm believes that this trend will continue, further reducing the demand for Ether.
Overall, the research firm believes that Bitcoin is the better investment option for the foreseeable future. It believes that Bitcoin’s institutional interest and low fees will continue to drive its price higher, while Ether’s lack of institutional interest and high fees will keep its price stagnant.
Investors had a poor week for cryptocurrencies, as Ether saw a dramatic crash in prices. This has prompted research firm Fundstrat Global Advisors to reverse its outlook on the currency, and instead advise investors to favor Bitcoin instead. Investors are now faced with the question of whether it is time to switch their focus away from Ether to other cryptocurrencies. This article provides a closer look at the reasons why crypto investors may want to rethink their current investments.
1. Poor Week Results in Reversal of Outlook for Ether
After a poor week of trading, Ether, the backing cryptocurrency for the blockchain system Ethereum, has seen its fortunes reverse. Analysts had initially believed that ticket prices could again reach historical highs, but now believe this to be unlikely.
The currency saw a radical slide in market capitalization, dropping from US$250BN to US$191BN. The market cap for Ethereum is now US$50.8BN, down sharply from the previous all-time high of US$68.5BN.
Overall, the effects of Ether’s wild week have been far-reaching. Most notable was the implications for the DeFi market. All of these tokens depend on Ether, and as a result, their prices have dropped in lockstep with Ether’s slipping prices. With this reversal of outlook, many of these tokens may further experience price drops in the weeks to come.
2. Research Firm Recommends Favoring Bitcoin
A high-profile research firm, specializing in cryptocurrencies, stated that Bitcoin should be the most favorable asset in the cryptocurrency market — at least over the near term. More specifically, they identified the following reasons to back up this assertion.
- The first and foremost factor in their reasoning pertained to Bitcoin’s substantial overall size and magnitude compared to other available options in the marketplace. As the biggest and most influential asset, it functions as the measuring stick for the rest of the crypto industry. With the most advanced technology, it also acts as a compelling gateway to the usage of cryptocurrency in everyday life.
- The second reason to favor Bitcoin underscored its established brand recognition and ever-increasing mainstream adoption. Its popularity has been boosted by a number of corporations launching their own derivative products related to Bitcoin, such as the highly successful futures contracts. Furthermore, its supply is limited —21 million BTC will ever mine — creating an attractive avenue for investors seeking to trade on a dependable asset.
- The final important point of consideration cited by the research firm was Bitcoin’s liquidity. Bitcoin has maintained its status as the most liquid asset in the industry, with more than 100 exchanges worldwide that allow traders to engage in active arbitrage. The liquidity has extended to OTC markets as well, where investors can trade large orders in a more expedited fashion.
Overall, this report confirms that Bitcoin continues to occupy the most favorable position in the current cryptocurrency milieu, backed up by an impressive history of performance and several key advantages that linger.
3. Positive Outlook for Bitcoin in Coming Weeks
Rising Institutional Investment
The is bolstered by rising institutional investment. Companies such as Tesla, Square and Visa now hold bitcoin on their balance sheets, and Morgan Stanley will soon offer its clients access to bitcoin funds.
Alongside companies, high profile investors such as Paul Tudor Jones and Stanley Druckenmiller has publicly announced their support for the asset, and anticipate that the price of bitcoin will more than double in 2021.
Government institutions also continue to play an increasing role in the crypto market. This week alone, the UK announced it will consider a central bank digital currency (CBDC), and the US Treasury Department began the process for imposing sanctions through an Ethereum blockchain.
These developments have created a strong foundation for bitcoin’s rise, and reinforces the positive outlook for the digital asset in the weeks ahead.
This most recent report from CoinDesk Research is reflective of the market’s general sentiment towards cryptocurrency and serves as a reminder of the importance of keeping up with the latest developments in the space. Although Ether had a “poor week”, this serves as a lesson to investors that cryptocurrency assets are changing and ever evolving and as such, require careful and consistent observation.