Market Watch: When Will ETH flip BTC?
2020 Bitcoin Doubling Curve
| Jan | Feb | Mar | April | May | June |
|---|---|---|---|---|---|
| $6933 | $7467 | $8000 | $8533 | $9067 | $9600 |
| July | Aug | Sept | Oct | Nov | Dec |
|---|---|---|---|---|---|
| $10133 | $10667 | $11200 | $11733 | $12267 | $12800 |
Bitcoin's price is looking extremely weak.
If the doubling curve was strong enough, we'd be sitting at around $9600. Unfortunately, we seem to be testing $9000 support for the last 18 days. This support appears to be getting weaker and weaker as time goes on.
Not a great sign.
The last time this happened we basically crashed 50%. Of course that event was truly catalyzed by market greed (longs, futures, margin trades) an the unprecedented worldwide lockdown.
Look on the bright side.
I'm all in; I can't sell at this level. We are on the last leg of the 4 year Bitcoin cycle and there's no telling what will happen in the short or even mid term. Long term: fundamentals to hold have never been stronger, so that's what I have to do.
Fast recovery
It only took Bitcoin 5 weeks to fully recover after crashing to the doubling curve of the previous year. If that's how long recoveries are going to take, I'm not too worried about it.
Stock Market
Also we have to factor in that even if the stock market crashes again, we have to assume there isn't nearly as much greed and overextended bets permeating the market. There are less longs, less margin trades, and options are conservative at the moment. Everyone is trading out of fear, and there are already a lot less people to scare away due to the extreme volatility. Bitcoin fees are high, and there are many reports of coins heading into cold storage for the long HODL over the next year.
No matter what happens, it will be interesting.
We've never been in positioning like this. Crypto has never existed during such a crisis, and this crisis itself is one of the biggest we've ever seen. The housing collapse of 2008 was nothing compared to this monster. I barely gave the housing crisis 2 thoughts while it was happening.
People are irresponsible and overextended their loans to the max.
Yep, that tracks.
This one is different.
It's more fierce on every level as the military industrial complex whispers:
Don't forget we own you.
You have to do whatever we say.
Message received, military industrial complex!
When will you be sending National guard into my city and have them do a little fun dance for social media before you shoot rubber bullets at those who dared disobey? Soon, I hope! Super fun times!
Personally I think this dip under the doubling curve is going to springboard into a massive rally during August. Everyone keeps noting that level:
We have to break $10500
We'll that's where the doubling curve lands in August, and I've seen these springboards happen several times before as the doubling curve pushes through what many traders thought was an unbreakable resistance, building pressure as lines converge.
Of course if we rally too high above the curve it means we're bubbled, so I'm thinking about starting a powerdown soon just so I have some liquid coins in August to maneuver around in case I'm right. My target is x2.5 - x3 the doubling curve. That puts Bitcoin around $26k-$31k. Who knows what Hive would be in that scenario, I really have no idea, but I'd like to have some liquidity then to play the market.
Didn't you say ETH would fip BTC?
Much like Bitcoin being on a doubling curve per year, I think Ethereum could be on its own exponential curve. Let's call it x3.
So if we assume a baseline value of $10 for ETH at the beginning of 2017, we'd get the following numbers:
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|---|
| $10 | $30 | $90 | $270 | $810 | $2430 |
| 2023 | 2024 | 2025 | 2026 | 2027 | 2028 |
|---|---|---|---|---|---|
| $7,290 | $21,870 | $65,610 | $196,830 | $590,490 | $1.77M |
Meanwhile, Bitcoin in 2028 would be $3.27M if it continued on the doubling curve. Because Ethereum has a lot more inflation and coins than Bitcoin, we would have seen a flip significantly before that time.
How soon?
Well, ETH has about x6 the coins of Bitcoin, but more importantly, ETH volatility is also higher than Bitcoin. If we look at the 2017 bull run we see that ETH should have been trading around $30 according to a tripling curve, but instead spiked up to $1300 (x43). Meanwhile Bitcoin spiked to $20k while the doubling curve sat at $1600 (x12.5).
I think it's safe to say this trend will continue, and Bitcoin will have lower volatility (lower highs and higher lows) than ETH. This means a chance of a flippening event happening during one of these 4 year euphoric bull runs is higher than anytime else. I don't expect it to happen during the next epic bull run, but perhaps the one after that.
ETH's growth is explosive.
The other day I was taking a look at MyEtherWallet (MEW) and I was really blown away by how much work they've done. I haven't even opened their site for at least 2 years, and the amount of options they provide is extensive compared to before.
I was able to trade directly from my wallet using one of ten different platforms. The site ordered them in a way that put's the most profitable trades at the top of the list. That's just a single frontend. There is development everywhere on ETH, and it's just Bitcoin's job to just sit there and not change.
Unless of course the cryptosphere is under attack by outside forces in which case we'll need to use Bitcoin as the shield of security. There is no competition here, these are cooperative technologies/communities. People are already referring to Ethereum as Bitcoin's side chain quite often.
2025
If Bitcoin and Ethereum were to "magically" stay on their respective doubling curves and keep their 4-year volatility cycles, we'd be seeing a flippening as early as 2025.
During this time if ETH went x40 above the curve each coin would be trading for $2.6M (lol, what?), while Bitcoin would be trading around $4M per coin if it went x10 above the curve. Because ETH has x6 the coins that would put ETH market cap possibly around x4 Bitcoin's market cap.
Obviously I don't expect this to happen, as it is the most extreme scenario that assumes exponential growth and extreme volatility. However, if it did happen, I wouldn't expect ETH to maintain dominance levels for long.
Crypto market caps at these levels would be a threat to the entire legacy system as crypto threatened to gobble up every fiat currency. The pushback from governments and the military industrial complex would be severe, as they'd be on their last legs thrashing wildly to stay alive. It wouldn't be a good time for ETH, but it would be a very good time for Bitcoin and possibly various privacy coins like Monero and friends in the wake of such a disruptive event.
Conclusion
Will ETH flip BTC? Who cares? I view the cryptosphere as a vessel, and each network has a purpose to serve. When people are scared Bitcoin provides security. On sunny days perhaps the sails or the rudder will be a bit more interesting to those who are no longer acting out of fear. Too bad we haven't built any cannons yet. That would get interesting. Unfortunately adding weapons to our little lifeboat makes us a target for bigger fish. Best to just keep surviving.
