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Ethereum Positioned to Surpass Bitcoin in Market Capitalization and Price
Ethereum is gaining momentum, with analysts suggesting it may soon surpass Bitcoin in market capitalization and price. Key points include:
- Bitcoin is seen as digital gold while Ethereum aims to be foundational for the digital economy.
- Ethereum's monetary policy differs significantly from Bitcoin's fixed supply of 21 million coins; Ethereum has around 120 million coins in circulation without a cap.
- The EIP-1559 burn mechanism introduced in 2021 permanently removes a portion of transaction fees, making ETH deflationary.
- Since the upgrade, 4.6 million ETH has been burned, equating to about $13 billion, and new issuance dropped by 88%.
- Institutional inflows and increased network activity can lead to higher demand, tightening supply and pushing prices up.
- Ethereum has shown historical outperformance after Bitcoin market tops, with significant rallies following Bitcoin’s declines in previous cycles.
- The ETH/BTC pair indicates a shift, with Ethereum recently ending a 944-day downtrend, signaling a potential regain of market dominance.
