During the second half of 2020, we saw a growing interest in cryptocurrencies from institutional investors and big capital. However, all the attention of the whales, as well as all the attention of the public, was fixed on Bitcoin (BTC). Today, we will look at why Ether (ETH) is a more attractive asset and why this cryptocurrency should become the “first cryptocurrency” for every investor.
Let’s start with the numbers: ETH’s growth since its March 2020 low after the coronavirus-induced market crash has been 1,200%, whereas BTC has only grown around 700%. ETH’s growth since its March 2020 low after the coronavirus-induced market crash has been 1,200%, whereas BTC has only grown around 700%. Of course, against the backdrop of record highs for Bitcoin, whose price reached $ 40,000, the rise of Ether to $1,400 does not seem so impressive. Moreover, the market capitalization of ETH is five times less than the volume of the BTC market. But what is more important for an investor: nice numbers and records of an asset from a portfolio or high income?
There are very strong reasons to believe that Ether will continue to rise in price in 2021 and bring more profit to investors than the “most famous cryptocurrency,” Bitcoin.
Demand among developers
Ethereum is the number-one platform for building blockchain projects and launching decentralized applications. The chart below displays the number of unique ERC-20 tokens traded during the first years since the launch of the Ethereum network. And despite the fact that the rate of expansion of the market for blockchain startups has slowed down since the initial coin offering bubble burst in 2018, their total number is still growing.
And even despite the fact that Ethereum has serious competitors — such as Tron, Polkadot, Cardano, Cosmos and Tezos — Vitalik Buterin’s cryptocurrency platform continues to be a leader in this direction.
Growing transaction volume
During 2020, more than $1 trillion worth of transactions were recorded on the Ethereum blockchain. These figures exceed the transaction volume of payments giants like PayPal, which is used by over 350 million users and has with average volumes that do not generally exceed $200 billion per quarter.
Also, keep in mind that each transaction generates network fees paid in ETH. And since the network’s growth rates are still high, we can confidently expect the continuation of the “bullish” trend of ETH. In any case, interest in cryptocurrency is increasing, as is the number of active wallets, the number of transactions on the network and the average transaction size.
Development of the DeFi sector
Despite Bitcoin’s leadership in the cryptocurrency market, Ethereum remains the leader of the young decentralized finance industry. Highly popular in the summer of 2020, DeFi lending and staking projects continue to grow, attracting new investments.
The total value locked in decentralized finance since the beginning of 2020 has grown nearly 3,300%, from $687 million to $23.2 billion. And it is Ethereum that is the main platform for the creation and launch of most new DeFi projects and stablecoins.
The emission of stablecoins is constantly growing, as digital assets backed by the value of less-volatile fiat currencies are a very convenient tool for quick settlements between users, for forming trading pairs on crypto exchanges and for saving capital from high volatility in your crypto wallet.
Separately, we should talk about the interest of institutional investors in decentralized finance. While the chaos in the DeFi market nearly eroded institutional confidence in the potential of blockchain in the financial sector in the summer of 2020, public companies continue to show interest in the new asset type.
In August 2020, Archax and Algorand revealed plans to develop tools for introducing DeFi among institutions. And in the fall of 2020, it became known that xSigma, a subsidiary of the Nasdaq-traded ZK International, is working on the development of DeFi services and is preparing to launch a decentralized exchange for trading stablecoins.
We all remember what big investors’ attention to Bitcoin led to last year, right? Now, it looks like other areas of the cryptocurrency industry are in for the same, and some of them are directly related to Ethereum. And the main advantage of Ethereum lies in the versatility of its technology and its growing community.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Nick Bel is a cryptocurrency enthusiast and tech writer based in London. He is passionate about finance and emerging technologies, such as blockchain, cryptocurrency and artificial intelligence.
Korean Government To Levy Taxes On Bitcoin Capital Gains Starting 2022
As cryptocurrencies continue to pick up steam and encompass the features of regular asset classes, governments have likewise imposed taxes on capital gains from digital currency. South Korea is the latest country to adopt this initiative. Its Ministry of Economy and Finance said it will levy taxes on cryptocurrency profits from next year.
The South Korean government is going ahead with its proposal to tax cryptocurrency returns after several reconsiderations. A local news agency, Yonhap reported in December that the National Assembly’s Planning and Finance committee deliberated on the amendment of income tax laws and individual consumption tax laws.
As part of the income regulatory initiative, cryptocurrency traders and investors are mandated to pay 20 percent if they earn more than 2.5 million won (almost $2300 at the present exchange rate) from bitcoin and other cryptocurrencies. Gains below 2.5 million won will not be taxed. The law was initially scheduled to be implemented in October this year, but it will now be enacted in 2022.
According to the new report, bitcoin gains will be filed under ‘other income.’ Cryptocurrency investors will report their gains through an income statement and will pay taxes in May every year.
A turn of proceedings saw South Korea become a burgeoning cryptocurrency market. In 2017, the government announced that it would strictly regulate cryptocurrency transactions and even shut down exchanges in the country after Seoul-based exchange, Youbit, was hacked.
Bithumb Tax Saga
This is not the Korean government’s first attempt at bitcoin taxation. Korea’s National Tax Service asked cryptocurrency exchange, Bithumb to pay its foreign customers withholding taxes to the tune of 80 million won in 2019.
There were uncertainties surrounding that. It was unclear whether the cryptocurrency industry was subject to withholding tax. Bithumb filed a complaint to the tax tribunal over what is referred to as a “groundless” tax imposed by the NTS. It also argued that cryptocurrencies were not recognized by South Korean law and should not be taxable.
The industry has evolved since then. Cryptocurrencies are bridging the gap on conventional assets, and emerging laws classify them as taxable properties.
Vice President of Nigeria Tips Cryptocurrencies To Challenge Traditional Banking
The Nigerian cryptocurrency community was shaken to its core when the country’s apex bank released a circular warning financial institutions to desist from enabling cryptocurrency transactions. The Central Bank made arguments to justify the decision, with several notable figures weighing in on the subject.
Nigeria’s Vice President, Prof. Yemi Osinbajo is the latest to share his view on the ban. In his keynote address at the CBN Bankers’ Committee Economic Summit, Osinbajo tipped digital assets to fiercely challenge traditional and reserve banking in the future.
Calls For Knowledge-Based Actions That Will Prove Beneficial
The ban on cryptocurrencies has continued making the rounds in Nigeria. Several weeks after, it has finally forced reactions from the upper echelon of the government. Vice President Yemi Osinbajo bared his views at a summit organized by the Central Bank earlier today.
He admitted to the disruptive capacity of cryptocurrencies and blockchain technology, stating that they could well displace existing banking systems in the coming years.
Cryptocurrencies in the coming years will challenge traditional banking, including reserve banking, in ways that we cannot yet imagine, so we need to be prepared for that seismic shift. pic.twitter.com/tbIR8eah2s
— Prof Yemi Osinbajo (@ProfOsinbajo) February 26, 2021
He further opined that emerging technologies like blockchain must be adopted strategically, before praising the regulatory bodies for being ‘very articulate’ with their measures. He called for initiatives that will enable people to enjoy the benefits of blockchains and cryptocurrencies while keeping the adverse effects in check.
Prior to Osinbajo’s remarks, CBN Governor, Godwin Emefiele publicly defended the ban, saying that cryptocurrencies were created “out of thin air”. He further described cryptocurrencies as being “used to describe the activities of players in an electronic dark world”
Many Nigerians have taken the Vice President’s comments with a grain of salt. They urged him to use his influence to turn the tides instead.
Waging War Between Cryptocurrencies and Nigerian Banking System
Industry enthusiasts in Nigeria interpreted the CBN ban as a direct attack on cryptocurrencies. Speculations emerged that the apex bank was rattled by the traction gained by the digital assets and the fact that they were gradually displacing conventional banks.
A Nigerian economist shared a shocking statistic that bared the Nigerian Stock Exchange trading volume and how it measured against the trading volume on Binance.
How important is crypto in Nigeria? On binance today the value of BTC/NGN trades was worth N13.4bn. For context the volume of trade on the Nigerian stock exchange today was N5.6bn. And binance is just one exchange.
— Nonso Obikili (@nonso2) February 5, 2021
In all of these, it is widely rumored that the adoption of bitcoin in last year’s protest against police brutality was the last straw to break the camel’s back. Activists spearheading the protests started accepting bitcoin donations after the Central Bank issued orders to freeze their bank accounts. The recent ban allegedly signals the central bank’s intention to maintain a stronghold on the country’s monetary system.
Entrepreneur and investor, Victor Asemota believes that banning cryptocurrencies is self-defeating and does not address the deficient banking system. He tweeted :
“I have predicted the demise of traditional banking institutions in Africa for a while now until things accelerated during the pandemic and agent models became prominent. The cost structure of old banking Africa do not make sense. Community banking and cooperatives make more sense. What happened to Nigerian remittances during the pandemic was that people discovered more efficient channels to send money home as bank branches were closed. We now had multiple FX exchanges as people became aware that it was lucrative. Crypto is not the problem, it is banking.”
Stellar, BitTorrent, DigiByte Price Analysis: 28 February
The cryptocurrency market has had to face increased bearish momentum in the past week and with Bitcoin dropping to the $45k price range, many of the market’s altcoins too have followed BTC and traded lower. At the time of writing, Bitcoin was trading at $44,474 with a 24-hour trading volume of $42.9 billion.
For altcoins like Stellar, DigiByte, and BitTorrent such has been the case and an immediate recovery looks unlikely given the current market conditions.
Stellar’s price fell by over 15 percent in the past week and currently trades at $0.41. According to CoinMarketCap’s list, the coin has a market capitalization of over $9.3 billion and occupies the 10th spot. The coin’s price has tested the support at $0.37 in the past few days and is now making slight gains towards its immediate resistance at $0.54. If the present support would fail, XLM may even drop down towards the second support at $0.27.
The Bollinger Bands for the coin have contracted and show less volatility in the coin’s price action. The RSI indicator looks bearish at the moment as it heads closer to the oversold zone.
BitTorrent’s price fell by over 28 percent in the past 7 days and is currently valued at $0.0011. The bearish pressure is visible as the coin’s price plummeted by over 8 percent in a day’s time. The coin is currently testing its support level around its current trading price and if this support fails BTT is likely to undo all its recent gains and trade around the $0.0004 price range. There is significant resistance around the $0.0014 range if an uptrend were to occur.
The RSI indicator for the coin is falling steadily as it heads into the oversold zone. Interestingly, the EMA ribbons have settled below the coin’s trading price and are offering support for the coin.
DigiByte is currently trading at $0.051 and has a market cap of over $730 million. In the past week, the coin’s price fell by 33.6 percent and currently finds itself close to the support level at $0.049. If the downtrend were to continue there is another support around the $0.035 price level that could help stabilize the coin’s price.
The MACD indicator and the RSI signal increased bearish pressure for DGB. The MACD indicator has undergone a bearish crossover while the RSI continues to move into the oversold zone.
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