In December, ether surpassed bitcoin for the first time in trading on the NBX crypto exchange. However, many cryptocurrency buyers are looking to bitcoin when the turmoil rages.
Ethereum (Ether) is the second largest cryptocurrency, with a total market capitalization of all issued “coins” at $289 billion (KR2589 billion). Bitcoin alone is bigger at $699 billion.
However, in the past year, Ethereum has taken a strong approach.
Leif Freiho, Director of Communications at Norwegian crypto exchange NBX, does not think it is a coincidence that interest in Ethereum is growing rapidly.
The blockchain technology used in Ethereum is an important tool in smart contract development, and is widely used in challenge applications and NFTs, she tells E24.
Such smart contracts can be used to find new solutions to many challenges in the business world related to, for example, traceability, sustainability and guarantees, Freihow points out.
– Therefore, we believe that interest in Ethereum and currencies using their blockchain technology will increase in the future, she continues.
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The biggest for the first time
When NBX settled into trading position in 2021, they saw an interesting development.
In December, the trading volume of Ethereum was for the first time greater than that of Bitcoin. The question is whether this is a trend that will continue into 2022, says Freihow.
After the violent boom in cryptocurrencies in recent years, with lower interest rates and money printing in connection with massive crisis packages, 2021 has so far led to a marked decline.
It comes at the same time as the stock market is down, especially for growth stocks based on future earnings and other risky investments. Fears that high inflation will cause the US Federal Reserve to tighten monetary policy too quickly are now scaring investors.
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Both bitcoin and ether rose to record highs in November of last year, but hard times have since led to a price halving. Ether is now priced at $2,398 and $36,780 in Bitcoin.
In January, bitcoin once again narrowly surpassed ether in trading volume on NBX. Excluding other cryptocurrencies, bitcoin accounts for 55 percent against 45 percent for ether.
Many bitcoin investors are long-term, sitting on stocks even in turbulent times. When the market is down, many of them also take the opportunity to “buy the dip,” says Freihow.
But the larger trend of Ethereum growing over Bitcoin continues, despite slight changes month by month, she adds.
At Firi, the largest crypto exchange in the Nordic countries, they confirm the trend with increased interest in Ethereum.
“But I think there is still some time before Ethereum really flips Bitcoin in terms of market share and market cap,” Firi CEO Thuc Hoang told E24.
Especially these days, you see Bitcoin dominance on the rise again. For many, bitcoin is more than just an investment object, but it’s also the so-called “safe haven” within the cryptocurrency, he adds.
Hoang believes that Bitcoin’s value development lies in whether it can prove that it can be a stable value carrier in times of financial market turmoil. For Ethereum, there are incentives to make applications more efficient, as they use it to pay for services in decentralized finance.
However, I expect Ethereum to continue to drive innovation at the technology level towards decentralized finance in the coming years, he says.
Cryptocurrency investments are associated with significant risks, and both Norwegian and international authorities have repeatedly warned of the risk of losses.
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