Okay... So I haven't completely moved all of my Bitcoin (BTC) into Ethereum (ETH), but I have moved some of it... About 50% of it and here's why.
Bitcoin has surged to new all time highs already this year and I believe it will continue to do so for the rest of this year, but how that price movement will compare to that of Ethereum is why I have decided to move some of my holdings over to ETH.
At the start of this year, many crypto analysts were predicting Ethereum to rise to being worth about 10% of Bitcoins price... But this hasn't happened. In fact last month, Ethereum fell to being worth about 3% of a full Bitcoin. Ethereum's network has become overloaded during this bull run, resulting in transaction fees on the network to surge (in some cases being $150 or higher to complete a transaction). While Ethereum does have solutions coming in the near and long term future to reduce these fees and increase how many transactions can take place at once on the network, delays and issues with these upgrades have directed investor's attention and investments to other cryptocurrencys, but this won't last forever.
Binance Coin (BNB) is a cryptocurrency that has recently surged in price due to the higher transaction fees (or gas fees) associated with Ethereum. In fact it is now the 3rd largest cryptocurrency out there! With Ethereum's network being so crowded, investors began to search for other alternatives, one of which being Binance. Binance has surged in price from around $38 at the start of this year to now being worth around $500 after topping out at a whopping $600 per coin. If you caught this, that was a whopping 16x return on your money in 4 months! During the same period Ethereum's price rose from around $740 to around $2,400, being only approximately a 3x return on your investment and Bitcoin rose from around $28,000 to $63,000 being only just over a 2x return on your investment. So can Binance continue to climb with that level of growth or has it run out of "gas"?
I'd be cautious investing into binance right now. The price has surged to all time high after all time high and is now on a correction path as investors take profits but Binance may break out of this correction soon. Where these profits end up is the question many want answers to and if Ethereum can get ontop of its network issues and lauch their solutions successfully, I believe some of the profits could end up back in Ethereum.
Despite having these issues, Ethereum has still managed to rise in price during this bull run and has already outperformed Bitcoin this year. There are so many additional reasons as to why I believe Ethereum will continue to outperform and rise in price more dramatically than that of Bitcoin as some changes to the Ethereum network will help drive the price upwards as Ethereum changes from an inflationary asset to a deflationary one. More on this in future articles.
Ethereum's temporary solutions before Eth 2.0 is launched should assist with resolving these issues and should also decrease transaction duration. When Ethereum will actually officially launch these solutions and upgrades can be a bit of a mystery as Ethereum is renounded for delaying upgrades on multiple occasions. Despite this, Ethereum is bringing much needed upgrades to their network sooner than later and understand the importance to urgently resolve these issues.
Ethereum has continued to outperfom Bitcoin for almost every year of its existance and due to the underlying technicals of Ethereum, I believe it will continue to do so as there are far more uses for Ethereum compared to Bitcoin. In the last bull run, during the month of June in 2017, ETH topped out at being worth 15% of a full Bitcoin and its possible Ethereum could climb to those levels again. Some analysts predict that Ethereum could be worth $25,000 by the end of this year, which would be a 10x return on any investment placed into Ethereum today if this becomes reality.
With Ethereum having the second largest market cap of any crypto, it is also generally a relatively safe investment option for anyone that is new to the cryptocurrency space. Ethereum has many other cryptocurrencies built on their network and along being partnered with VISA, I can only see the Ethereum demand and price increasing in the future, hence why most of my holdings are now in Ethereum.
Disclaimer: I am not a financial advisor and any investments you make with your money are done so at your own risk. Happy investing and good luck to us all! ;)
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