Ethereum and Bitcoin: Are These Cryptocurrency Giants Too Big To Fail?

Bitcoin ($BTC) and Ethereum ($ETH) have their parts to play in the landscape of cryptocurrencies, but is the future of the markets forever tied to the success or failure of these two giants of the crypto world?

Bitcoin is often seen as an early indicator of success; as the Digital Asset Fund Flows Weekly report that came out on the 30th Jan suggests, what goes down goes right back up again if you’re too big to fail.

Trading group CoinShares confirmed that  $117m (£97.4m) went into the crypto markets in the last week of January. This coincided with Bitcoin rebounding 40% in the same month. This increase marked the largest inflow of institutional cash since mid-last year.

Ethereum (ETH) completed its long-time anticipated ’Merge’ update last year. The Merge gave the capacity for the blockchain to move on from the energy-inefficient validation transactions process with computers.

This switch vastly reduced Ethereum’s power consumption, thus increasing productivity, and consumer confidence in sustainability; thus the price of Ethereum jumped shortly after. Innovation like this has been the reason for its solid footing within the industry.

Bit By Bitcoin

Many analysts were hailing that the Bitcoin boat was in troubled waters, but on-chain indicators say otherwise. The biggest cryptocurrency by market capitalization in town ain’t done yet. Analyzing data from Glassnode, we see that the indicator has increased by over 20% since early Jan.

The report stated that: “The current price is the incentive to sell and the conviction in the ratio is a series of sub-metrics that factor in the opportunity cost of not selling. The lower the ratio, the higher the conviction that investors have.”

According to OrBit Markets, the leading cryptocurrency futures and options exchange Derebit also displayed an increase in the volume of Bitcoin options. It jumped 82% compared to December, which is not too shabby.

Quantitative research analyst at data firm Laevitas Ume-Ezeoke also stated: “You’ve actually seen a couple of people trading in $50,000 calls, for example, that’s been the general appetite that we’ve seen – just increased appetite for upside.”

Ethereum Delirium Update

As stated, nearly five months ago, Ethereum blockchain was able to complete its new Merge update successfully. Now we will see a further update with ‘Shanghai’ a further push to hold onto the reigns as king of the hill.

The new update will allow all associated tokens used to order the transactions on the designated blockchain to be withdrawn. This could potentially revolutionize how the market functions as all those tokens are tied up within stalking wallets. 

In Conclusion

You can never really know if any big player is too big to fail. It depends on how the market functions and how you react to that market. You could look at the financial crisis and available investment income from individual to individual.

One thing, however, that helps you to react to these elements is innovation; how can you keep things fresh and respond to the needs of the user? It doesn’t come from the wind why these two are still ahead of the game.

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