HomeNewsCryptocurrency Showdown: Is Ethereum Gearing Up to Surpass Bitcoin?

Cryptocurrency Showdown: Is Ethereum Gearing Up to Surpass Bitcoin?

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  • Fidelity Digital Assets’ recent report highlights Ether’s promising outlook over the next 12 months.
  • A survey from CryptoVantage shows 47% of investors believe Ether may outdo Bitcoin.

Fidelity’s Positive Forecast for Ethereum

Fidelity Digital Assets’ “Q2 2023 Signals Report” released on July 18 presents a bullish projection for Ethereum’s performance over the next year and beyond. Despite a 62% increase in Ether’s value since the beginning of the year, Fidelity maintains a cautious stance about the sustainability of the upward trend in the short-term.

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In their assessment, Fidelity focuses on various indicators of Ethereum’s health. These include Ethereum’s higher burn rate versus coin issuance, the so-called “new address momentum” (indicating fresh user engagement), and an increase in the number of network validators. The report suggests that since the ‘Merge’ in September 2022, net issuance resulted in a net supply decrease of over 700,000 Ether. This coupled with data from Glassnode showing an uptick in first-time Ethereum transactions, underlines a robust network adoption.

Moreover, the quantity of active Ethereum validators rose by 15% in the second quarter, an important factor indicating network security and decentralization.

The Anticipation Around EIP-1153

Fidelity also recognizes the growing momentum surrounding Ethereum Improvement Proposal (EIP) 1153. This protocol update is set to enhance smart contract efficiency, reduce costs, and boost the Ethereum Virtual Machine’s design. It’s a pivotal change, especially for decentralized exchanges (DEXs), which have seen Ethereum’s dominance shrink to 46% from 60% over the last half-year.

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Further supporting Ethereum’s potential is the upcoming upgrade to Uniswap, a leading DEX. The soon-to-launch Uniswap v4 will introduce unlimited types of pools using programmable buttons, native ETH support, and a singleton contract that performs internal transactions before settling final balances.

The Ethereum Network’s Challenges and Opportunities

Despite the positive outlook, challenges lie ahead for the Ethereum network. High gas fees have led to a reduction in Ethereum’s total value locked, reaching its lowest since April 2020 at 13.55 million ETH. Moreover, decreased activity in decentralized applications is apparent, as indicated by DappRadar’s 30-day unique active wallet data.

Nevertheless, Ethereum remains a strong contender in the crypto market. According to a survey by CryptoVantage involving 1,000 North American cryptocurrency investors, 47% consider Ether as the top contender to outpace Bitcoin. While this is an optimistic outlook, the survey does not indicate that respondents necessarily anticipate Ethereum to flip Bitcoin.

Fidelity’s report outlines compelling reasons for optimism around Ether’s 12-month performance. However, the ongoing issue of high gas fees and the apparent disinterest from leverage buyers indicate that Ether price may face potential downward pressure.

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Brian Johnson
Brian Johnson
A dedicated Bitcoin journalist passionate about uncovering the latest trends, developments, and innovations in the world of cryptocurrency, while delivering engaging and well-researched articles to inform and educate readers on the dynamic digital finance landscape.
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