Ethereum Gains, Bitcoin’s Saving Grace -Digital Gold Narrative
Bitcoin’s “digital gold” narrative might prove to be the best initiative in the demandingly competitive market. In an attempt to revive the economy, the Federal Reserve, which has already printed about $3 trillion of new money, is now committed to reducing the purchasing power of the U.S. dollar.
Such type of high inflation occurs when the country is weighted by debt and the interest rates are cut to zero, which is now the case in the U.S.
President of Federal Reserve Bank of St. Louis James Bullard states that “We’re at a moment where you may see some inflation”.
This high inflation trend may prove to be good for bitcoin as many investors believe it to be a possible restraint against inflation. They believe bitcoin to be a digital and a more portable asset to gold. High inflation trends can be traced back to the 1980s where the wealth shares by America’s richest started to increase.
Regarding bitcoin as an inflation hedge may prove to be the most engrossing investment stance which cancels the argument of bitcoin maximalists of bitcoins being dominant digital assets. The market value, referred to as “dominance” by maximalists, of bitcoin fell from 68% to 57% last week as reported by CoinMarketCap.
The main competitor of bitcoin is ether (ETH), which is the native token of the Ethereum blockchain. Ether’s market value climbed to approximately 12% of the industry total where it was at about 6.8% at the start of the year. This can be attributed to the large movements of Ether as it serves as the primary venue for the rapidly growing domain of decentralized finance.
Bitcoin’s market dominance has been going downhill this year as Ethereum takes initiatives to catch up to its “digital gold” competitor.
The rivalry between the two is fueled by the users who latch on to the narratives that support the asset of their choice, reports Kevin Kelly, co-founder of the market-analysis firm Delphi Digital.
Increasing coronavirus cases across Europe is causing the leading cryptocurrency, bitcoin, to drop along with its stock rates.