Some analysts are hinting at the downfall of cryptocurrencies because of the only weakness they highlight, Central Bank Digital Currencies.
Bitcoin alone has swollen itself with a price averaging at around $57,000 at the time of writing, which is just insane for any sort of asset. The past year has been a diamond for the crypto enabling it to gain a gigantic 1000% in value, with no other crypto being even close to it.
Even after all this boom in value, analysts still believe that this recent spike in the price of Bitcoin will not matter unless and until cryptocurrency manages to maintain its volatility. Bitcoin currently has never seemed to show any signs of improving its volatility. Sometimes, it dips at a rate that risks its presence in the market, while at other times, it rises so high that it breaks even its own records.
This is particularly not a good sign for many investors and traders to deal with. The only way Bitcoin can keep its volatility is to either maintain a steady rise or hover at a fixed price range. Otherwise, the rest of the pack will not be far behind in taking the number 1 seat.
Much more practical and stable currencies like Central Bank Digital Currencies, also represented as CBDCs, might be a poison for the crypto space, soon proving itself to be a better choice in the eyes of investors and traders because of the reliable stability, but after analyzing the market, another popular hard-working challenger from the crypto space, Ethereum is closing in to join the fight for claiming the throne.
Rise of Ethereum
The CBDCs might be able to poison Bitcoin, but they still fear the rise of DeFi, replacing the traditional banking system with blockchain-built protocols. According to analysts, Ethereum will be the strongest if it keeps on going like this. It is currently the 2nd largest crypto worldwide, gaining a ginormous 1200% in value since the last year. The currency has not shown any signs of drastic downfall and continues to rise in the charts, currently sitting at the number 2 spot. The addition of new Ethereum-based projects has skyrocketed the asset attracting more and more new traders daily who seek to take advantage of the opportunities Ethereum provides.
Analyst Ryan Watkins has stated that with the much wider variety of features and favorable user flexibility, Ethereum might overcome Bitcoin someday, taking control of the throne that Bitcoin currently possesses.