- Ethereum’s transition to PoS puts it on course to give Bitcoin a fight.
- A prediction said that Ethereum’s revenue could hit $51 billion by 2030 while ETH may hit $11,848.
Destiny cannot be denied. It can only be delayed. This statement explains the sentiment of those who believe that Ethereum [ETH] will flip Bitcoin [BTC] by 2030. However, this discussion has been going on for a long time.
But at the time of writing, Ethereum had not yet flipped Bitcoin in terms of market cap.
Despite the state of things, some Ethereum supporters argue that the flipping would happen. AMBCrypto checked if there was any time that the smart contract blockchain came close to overtaking Bitcoin.
According to data from Blockchain Center, Ethereum’s market dominance rose to 36.9% in June 2017.
At that, Bitcoin’s dominance was around 44.4%. Eventually, the flipping did not happen. But between that period and now, a lot of things have changed.
Source: Blockchain Center
Ethereum’s new model changes Bitcoin’s operation
One of the major changes was Ethereum’s move away from Proof-of-Work (PoW). Up until September 2022, both Bitcoin and Ethereum utilized the PoW consensus mechanism.
The PoW mechanism allows the verification of transactions through miners. In this case, miners get rewards for adding computation power to the network. But Ethereum stopped using that method and transitioned to Proof-of-Stake (PoS) during a major upgrade called “The Merge.”
With PoS, Ethereum no longer needs miners but validators. Here, users don’t have to be miners, and they also get rewarded for validating new blocks of transactions.
This “ease” has aided Ethereum’s popularity. It is also one of the reasons some predictions are confident that Bitcoin will play second-fiddle by 2030.
However, Bitcoin has not been resting on its oars. Recent developments have proven that the Satoshi Nakamoto-developed project could be ready to fight Ethereum pound for pound.
Competition escalates between the kings
This assertion could be linked to the creation of NFTs on the Bitcoin network. During the 2021 bull market, NFTs got popular, and most of them were built on the Ethereum blockchain. For this reason, demand for ETH increased.
However, the introduction of Bitcoin Ordinals in 2023 Q1 has ensured that Ethereum has intense competition in that regard. AMBCrypto looked at CryptoSlam’s data and found that Bitcoin was giving its opposite number a run for its money.
At press time, NFT seven-day sales on the Ethereum blockchain were $92.39 million. Bitcoin was a close second with $90.18 million within the same period.
Source: CryptoSlam
So, if demand for ETH rises as a result of these assets, there is a high chance that BTC also follow. Should this remain the same case, Ethereum flipping Bitcoin by 2030 would be difficult.
Furthermore, Ethereum dominating the Decentralized Finance (DeFi) space makes a strong case for the flipping. This is major because of its smart contract functionalities.
At the peak of the bull market in 2021, Ethereum’s Total Value Locked (TVL) hit $97 billion.
The TVL determines the total value of digital assets locked in a protocol. So, the increase at that time implied that market participants trusted the project enough to continuously add liquidity to it.
Source: DeFiLlama
5 figures for ETH by 2030?
This DeFi dominance is why some analysts believe that the Vitalik Buterin-led project can bite into Bitcoin’s market share. For example, in May 2023, VanEck predicted that the blockchain’s revenue could rise as high as $51 billion by 2023.
The research also mentioned that Ethereum’s dominance among smart contracts protocols could rise to 70%. The mutual fund and ETF management firm also talked about the price, noting,
“In our Base Case, we assume that Ethereum will achieve $51B in annual revenue in the year ending 4/30/2030. We deduct a validator fee from this total, 1%, and a global tax rate of 15%, and we arrive at cash flows of $42.90B to Ethereum. Assuming an FCF multiple of 33x, 120.7M token, we come to a Base Case 2030 Price Target of $11,848 per token.”
On an all-time basis, ETH’s price has increased by 89,382.45%. BTC, on the other hand, had seen its value rise by 68,863,742%. By comparing both prices, one can assume that ETH was undervalued massively undervalued compared to Bitcoin.
However, there have been predictions that the Bitcoin price could rise higher. One of the reasons could be linked to the recently-approved Bitcoin spot ETFs.
With the ETF approval, more institutional capital is expected to flow into Bitcoin. This could also affect the price action positively. As a result of this, ARK Invest CEO Cathie Wood noted that BTC could cross the $1 million mark by 2030.
Ethereum flips Bitcoin here
In the meantime, analyst Michaël van de Poppe believes that the Bitcoin spot ETF approval was a signal for ETH to shine. According to him, the development could force liquidity rotation into the Ethereum ecosystem.
#Ethereum approaches the low of 2022 and is likely going to take the liquidity there.
If an ETF approval for #Bitcoin happens, I think we’ll have a liquidation candle on ETH/BTC and after that a rotation into Ethereum, combined with a bullish weekly divergence. pic.twitter.com/kGq91S7kq9
— Michaël van de Poppe (@CryptoMichNL) January 9, 2024
But will this lead to Ethereum flipping Bitcoin? Well, that might be hard to decide, considering that an Ethereum spot ETF could be approved before or by May 2024.
Regarding the number of holders, AMBCrypto analysis of Santiment showed that BTC had 52.76 million. ETH, on the other hand, had more than double that at 112.52 million.
Source: Santiment
Can Ethereum flip Bitcoin by 2030? Our verdict
This data indicated that Ethereum had experienced more adoption than Bitcoin. If the growth continues in this manner, then it could increase its chances of flipping Bitcoin by 2030.
Another possible impact of the flipping is the supply. For Bitcoin, it has a fixed supply of 21 million coins. This is one of the reasons Ethereum might find it hard to flip it.
Because if demand for BTC increases with its fixed supply, the price and market cap will go higher.
The supply of ETH, however, is unlimited. But the project, thanks to its burning mechanism, ensures that demand matches the ETH supply.
Also, the shift to PoS had greatly impacted the tokenomics. This is also one of the reasons market participants have stuck to ETH since it became a yield-generating asset.
Given its different use cases, demand from retail and institutions alike is expected to increase.
Realistic or not, here’s ETH’s market cap in BTC’s terms
But to flip Bitcoin would be a hard nut to crack. Furthermore, 2030 is a long time to predict what would happen with both projects.
But considering the recent developments, Ethereum might get very close to flipping Bitcoin. However, it is not guaranteed that the former would surpass the number one cryptocurrency by that time.
