- Ethereum’s transition to PoS puts it on course to give Bitcoin a fight.
- According to one forecast, Ethereum’s revenue could reach $51 billion by 2030, while ETH could reach $11,848.
Fate cannot be denied. It can only be postponed. This statement explains the sentiment of those who believe that Ethereum [ETH] will flip Bitcoin [BTC] by 2030. However, this discussion has been going on for a long time.
But at the time of writing, Ethereum had not yet overturned Bitcoin in terms of market capitalization.
Despite the state of play, some Ethereum supporters claim the flip would happen. AMBCrypto checked to see if there was a point when the smart contract blockchain was close to overtaking Bitcoin.
According to facts from Blockchain Center, Ethereum’s market dominance rose to 36.9% in June 2017.
At that time, Bitcoin’s dominance was approximately 44.4%. In the end, the flip didn’t happen. But between that period and now, many things have changed.
Source: Blockchain Center
Ethereum’s new model changes how Bitcoin works
One of the most important changes was Ethereum’s switch to Proof-of-Work (PoW). Until September 2022, both Bitcoin and Ethereum used the PoW consensus mechanism.
The PoW mechanism allows the verification of transactions through miners. In this case, miners receive rewards for adding computing power to the network. But Ethereum stopped using that method and switched to Proof-of-Stake (PoS) during a major upgrade called ‘The Merge’.
With PoS, Ethereum no longer needs miners, but validators. Here, users do not have to be miners, and they are also rewarded for validating new transaction blocks.
This “ease” has fueled Ethereum’s popularity. It’s also one of the reasons why some predictions rely on Bitcoin playing second fiddle by 2030.
However, Bitcoin has not rested on its oars. Recent developments have proven that the project developed by Satoshi Nakamoto could be ready to take on Ethereum pound for pound.
The competition between the kings escalates
This claim could be linked to the creation of NFTs on the Bitcoin network. During the 2021 bull market, NFTs became popular, and most of them were built on the Ethereum blockchain. For this reason, the demand for ETH increased.
However, the introduction of Bitcoin Ordinals in the first quarter of 2023 has ensured that Ethereum has fierce competition in that area. AMBCrypto looked CryptoSlam data and found that Bitcoin gave its counterpart a run for its money.
At the time of writing, the seven-day NFT turnover on the Ethereum blockchain was $92.39 million. Bitcoin was a close second at $90.18 million during the same period.
Source: CryptoSlam
So if demand for ETH rises as a result of these assets, BTC is likely to follow suit. If this continues, Ethereum could struggle to overturn Bitcoin by 2030.
Furthermore, the fact that Ethereum dominates the Decentralized Finance (DeFi) space is a strong argument for the shift. This is important because of the smart contract functionalities.
At the height of the 2021 bull market, Ethereum’s Total Value Locked (TVL) reached a value of $97 billion.
The TVL determines the total value of digital assets locked in a protocol. So the increase at the time implicit that market participants trusted the project enough to continuously add liquidity to it.
Source: DeFiLlama
5 figures for ETH in 2030?
This DeFi dominance is why some analysts believe the Vitalik Buterin-led project could erode Bitcoin’s market share. In May 2023, for example, VanEck predicted that blockchain revenues could rise to $51 billion by 2023.
The study also mentioned that Ethereum’s dominance among smart contract protocols could reach 70%. The mutual fund and ETF management company also discussed the price, noting:
“In our base case, we assume that Ethereum will achieve annual revenues of $51 billion in the year ending April 30, 2030. We subtract a validator fee from this total, 1%, and a global tax rate of 15%, and we arrive at cash flows of $42.90 billion to Ethereum. Assuming an FCF multiple of 33x, 120.7 million token, we arrive at a 2030 base price target of $11,848 per token.”
On a historical basis, the price of ETH has increased by 89,382.45%. BTC, on the other hand, saw its value increase by 68,863,742%. By comparing both prices, one can assume that ETH was vastly undervalued compared to Bitcoin.
However, there are predictions that Bitcoin price could soar higher. One of the reasons could be related to the recently approved Bitcoin spot ETFs.
With the approval of the ETF, more institutional capital is expected to flow into Bitcoin. This could also have a positive impact on price action. As a result, Cathie Wood, CEO of ARK Invest, noted that BTC could cross the $1 million mark by 2030.
Ethereum turns Bitcoin around this
Meanwhile, analyst Michaël van de Poppe believes the approval of the Bitcoin spot ETF was a signal for ETH to shine. According to him, the development could force liquidity rotation in the Ethereum ecosystem.
#Ethereum is approaching the 2022 low and will likely push liquidity there.
If there is an ETF approval for #Bitcoin If anything happens, I think we will have a liquidation candle on ETH/BTC and then a rotation to Ethereum, combined with a bullish weekly divergence. pic.twitter.com/kGq91S7kq9
— Michaël van de Poppe (@CryptoMichNL) January 9, 2024
But will this lead to Ethereum flipping Bitcoin? That may be difficult to decide, as an Ethereum spot ETF could be approved before or by May 2024.
In terms of the number of holders, Santiment’s AMBCrypto analysis showed that BTC had 52.76 million. ETH, on the other hand, had more than double that at 112.52 million.
Source: Santiment
Can Ethereum Overturn Bitcoin by 2030? Our verdict
This data indicated that Ethereum had experienced more adoption than Bitcoin. If growth continues this way, it could increase Bitcoin’s chances of turning around by 2030.
Another possible impact of the pivot is supply. For Bitcoin, it has a fixed supply of 21 million coins. This is one of the reasons why Ethereum may find it difficult to turn around.
Because if the demand for BTC increases with the fixed supply, the price and market capitalization will become higher.
However, the supply of ETH is unlimited. But thanks to the combustion mechanism, the project ensures that demand matches ETH supply.
The shift to PoS also had a major impact on tokenomics. This is also one of the reasons why market participants have stuck with ETH since it became a return-generating asset.
Considering the different usage scenarios, demand from both retail and institutions is expected to increase.
Realistic or not, here is the market cap of ETH in terms of BTC
But flipping Bitcoin would be a tough nut to crack. Furthermore, 2030 is a long time to predict what would happen to either project.
But given recent developments, Ethereum could become very close to Bitcoin. However, it is not guaranteed that the former would surpass the number one cryptocurrency by then.