OK so before you start passing out pitchforks, I'd like to let you know that my portfolio is around 60% BTC, 30% ETH, 10% ALTS and that I've shed dears of joy when the market dumped 50% in May because I could load my BTC bags at those prices. However, over the past few weeks I came to the conclusion that ETH overtaking BTC in marketcap this cycle is inevitable and I'm gonna share with you the reason why.
ETH is the 2nd most valuable cryptocurrency because it offers access to Dapps in a completely decentralized and secure manner. The only thing BTC has over ETH is it's use as a store of value.
With the recent EIP-1559 upgrade, ETH's inflation rate has decreased to 2.2% compared to BTC's current 1.8%. With the upcoming transition to POS, it is expected that ETH's inflation rate will decrease to NEGATIVE 2.2%. This will effectively make ETH a deflationary asset and automatically give it better tokenomics than Bitcoin, removing Bitcoin's only advantage over Ethereum. If you add this to how close ETH came to flipping BTC back in 2017 without all these advantages, I think this event is more than probable this cycle.
They are both similar in terms of decentralization and trust from whales and institutions. Gas prices don't matter if you're a billionaire and you want to use the most decentralized chain for DEFI. Ethereum has also been showing increased strength during market downturns recently compared to when it used to bleed against Bitcoin. Higher expected returns for the same potential downside sounds like a good deal. Not owning any Bitcoin would obviously be a mistake as well, so I will begin slowly rebalancing my portfolio to achieve a 50/50 or 40/60 BTC-ETH balance.
BTC maxis fight me
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