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Author: Clem Chambers Source: Forbes Translation: Shan Oppa, Bitchain Vision
When the prices of the two related assets differ, a simple judgment is required.These assets will continue to diverge, and may even diverge further, or they will restore correlation at some time in the future.These relationships can be used to try to profit from price regression, and even use long and short strategies to maintain a neutral position in the market.
Most people expect prices to resynchronize to past ratios, but this is not necessarily going to happen.
Gold and silver are a good example.Throughout history, gold was once 5 times, 10 times, 20 times that of silver, and even 80 times that of silver, as it is today.
Although there are still a large number of precious metal believers yearning for the era of silver and gold currency, the recent 20:1 gold-to-silver ratio is gone forever, although some do dream about it coming back.
But that’s not the case.
In cryptocurrencies, similar situations are Bitcoin (BTC) and Ethereum (ETH).Bitcoin has been doing well since the cryptocurrency bottomed out in the cold winter.
Here is the chart:
I invest in cryptocurrencies through Ether because historically it has run longer and longer than Bitcoin, but as of now, it has performed poorly.
If you want to explain this, you might say that Ether developers have been tickling blockchain, regularly injecting their new ideas into the system, which may or may not solve the blockchain problem they want to fix, andThis tinkering reduces the value of Ethereum because it injects uncertainty.A group of geniuses fiddling with the crypto financial system, which, to some extent, is exactly what the government does with fiat currency, and why those who hate fiat currency and love cryptocurrencies want to get rid of fiat currency.Therefore, Ethereum developers’ role as a central bank may drag down their valuations.”Code is law” is less eye-catching when some young unnamed programmers can handle your encrypted packages like SWAT judges.
There is almost no such intervention in Bitcoin, and whenever some developers think there is something wrong with the system, the system will not be subverted.The concept of decentralization is still very popular in Bitcoin, and it is incredibly difficult to modify the system, and its structure has almost reached the level of decentralization.Unfortunately, Ethereum’s recent proof-of-stake structure, although beneficial to the environment, has left various risk sides, while Bitcoin continues to move forward, seemingly not affected by too many humans.
However, these are just theoretical pickiness.
If Bitcoin achieves the next round of growth people expect, Ethereum will also rise, and it is very likely to catch up with Bitcoin in percentages, or even continue to rise, just like the last time cryptocurrency rose in 2021Same.An investor who “all-in” Ether also believes that Ether will replace Bitcoin in the future, and if the price of Bitcoin exceeds $100,000, this may mean that the price of Ether will reach $25,000.I’m not an avid ether lover, but you can understand my reasons, no matter how optimistic my reasons are.If Bitcoin breaks through $100,000 again, the price of Ethereum will easily reach $8,000.
If Bitcoin performs well, it will also perform well; if we see the last segment of this cryptocurrency cycle repeating past performance, it does have a chance to catch up.
Meanwhile, the Ether ETF is available and will absorb a large amount of Ether, which should boost prices.ETFs began trading today, although the SEC is not very enthusiastic about cryptocurrency ETFs.
So the question is not whether Ethereum will catch up with Bitcoin, but whether cryptocurrencies will rise again before the end of this cycle?If you think so, then Ethereum will certainly perform well and will most likely surpass Bitcoin in the end.
Cryptocurrencies aren’t for the faint of heart, but it’s a great diversified investment tool that adds a touch of fun to a balanced portfolio.For speculators who are eager to act, this is also the only game in the city – of course, it is also the reason why many people come to the market to enjoy it.Before Christmas, fireworks will not be missing.
