CRYPTO: Does Ethereum react to Bitcoin the way silver does to gold

Does Ethereum react to Bitcoin the way silver does to gold

Which cryptocurrency is going to explode in 2021? What coins can one buy right now, to make it big in the near future? Which crypto is the next best thing to Bitcoin?

Many interested in cashing in on the historic run we have seen over the last few months, have been asking these questions and more.

Well, if the Executive Chairman of HIVE Blockchain Frank Holmes, CEO, and CIO of U.S. Global Investors was to be believed, the answer to those questions is Ethereum. During an interview with Kitco News, Holmes opined that ETH will be the next cryptocurrency to explode – the silver to Bitcoin’s gold. He opined,

“When gold goes to a 50-day moving average, and it goes up 15-20 percent, silver all of a sudden surges 30 percent. Ethereum to Bitcoin, is like what silver is to gold. Bitcoin makes the big charge, then all of a sudden Ethereum explodes to the upside. That’s the sweet spot for us.”

Meanwhile, even though BTC is used as a store of value, ETH incorporates more use cases thanks to the smart contract capabilities on its blockchain. Holmes said:

“Ethereum has many more uses than Bitcoin does, the same way silver does…20% of demand for silver is for solar energy. It has a green footprint; viruses can’t live on silver, it has many medical uses. The same thing with Ethereum; it is used for DeFi, for NFTs.”

Having said that, there are certain concerns regarding the altcoin. HIVE Blockchain, the first publicly traded crypto mining company listed on the Toronto Venture Exchange faced issues with the same.

“The biggest challenge we have mining for Ethereum is that so many young people have GPU chips for gaming, and they are all mining Ethereum so we get less coins. Our prices are up dramatically from a year ago, but the machines that used to produce 300 Ethereum a day when Ethereum was $300 — are now producing 80 a day.”

However, the biggest concern still was that its moving to a Proof-of-Stake (PoS) consensus mechanism, which could help “shrink the supply outside” but doesn’t “stop the demand and people mining for it.”

Nevertheless, he’s bullish on ETH.

Still bleeding…

Now, unfortunately, ETH suffered a 4% correction in the past 24 hours. At press time, it was trading near the $3400 mark. Now, this could be possible due of the recent outflows concerning Digital asset investment products. The same was highlighted in a recent CoinShares report.

The report stated that while Bitcoin inflows showed a strong positive trend, Ethereum faced a slight loss of $14 million being moved away from altcoins.

With Bitcoin showing a strong price rally at press time, Ethereum’s market share is steadily declining. So Ethereum is still weak from its price action perspective, however future prospects still seem bright.

This article was first written on yusmid.com


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