The team at Bloomberg: Ethereum could lose the number 2 spot to Tether by next year
According to Bloomberg, based on the October crypto outlook report, they predict that Tether will most likely edge out Ethereum from the number two spot. The report explains that there is a growing demand for both Bitcoin and crypto-assets that resemble the dollar. If this trend prevails, USDT will definitely continue to grow. Additionally, the increased adoption of stable coins is also a strong signal that Central Bank Digital Currencies will be launched in the near future.
The team at Bloomberg has predicted that Ethereum could lose the number 2 spot to Tether by next year
The report stated:
“Expect Bitcoin #1, Tether #2 in 2021 If Trends Remain the Same. Indicating demand for a digital version of gold (Bitcoin) and a crypto-asset like a dollar, if current trends prevail, the market cap of Tether may surpass Ethereum next year. The increasing adoption of stable coins is likely a precursor for central bank digital currencies and promises to be more enduring than alt-coin speculative excesses. The rapid rise in the market cap of stable coins indicates that central bank digital currencies (CBDCs) are a matter of time, in our view.”
With respect to the popularity of the stablecoin of Tether, the report went on to explain that it would take a mega event to halt the increasing adoption of Tether which is on a path to edge out Ethereum in terms of market cap.
Furthermore, ETH’s market cap has more or less stagnated since 2017 thus providing Tether with an opportunity to take the number 2 spot.
It should take something significant to stall the increasing adoption of Tether, the top stable coin, which is on pace to match the capitalization of Ethereum in a bit less than a year, based on the regression trend since the start of 2019.
Our chart depicts the stagnant market cap of Ethereum since 2017 vs. rapidly rising Tether, which jumped to a new high of almost $16 billion at the start of October.
Ethereum’s success drives imitation
According to DappRadar, in the third quarter of 2020, Ethereum accounted for 96% of the total transaction volume over decentralized applications, including the blockchain-based trading and lending networks that have exploded in popularity in recent months.
ETH price ave nearly tripled in 2020 to about $350. Such returns make better-known bitcoin’s 52% year-to-date gain look paltry. But success has brought a slew of problems, such as network congestion that has slowed down transaction processing and pushed up average fee rates to record levels.
Ten best-performing, smart-contract blockchain tokens with a market capitalization of at least $100 million, ranked by their returns over the past year versus ether | Source: Messari
Ethereum’s 2.0 upgrade is supposed to boost processing speeds to 1,000 to 4,000 transactions per second, but for now, the grumbling abounds. Scalability has been a critical issue for Ethereum. Ethereum’s first-mover advantage as the dominant smart-contract blockchain.
You can see the ETH price here.
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