Bitcoin and cryptocurrency prices have dropped back after staging a sudden recovery earlier this week.
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The bitcoin price, climbing to almost $45,000 per bitcoin after dropping to $39,000 last week, has stalled, falling sharply back toward $40,000. Meanwhile, other top ten cryptocurrencies ethereum, Binance’s BNB, solana, cardano and XRP have also dropped back, erasing much of the gains they’d made this week.
Now, analysts at Bank of America
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The price of ethereum and its biggest rivals solana, Binance’s BNB and cardano, have outpaced … [+]
“[Solana’s] ability to provide high throughput, low cost and ease of use creates a blockchain optimized for consumer use cases like micropayments, DeFi, NFTs, decentralized networks (web3) and gaming,” Bank of America analyst Alkesh Shah wrote in the note to clients this week, first reported by Coindesk.
Ethereum, the second-largest cryptocurrency after bitcoin, has surged over the last year as the popularity of decentralized finance (DeFi)—using crypto technology to recreate traditional financial services—and viral, digital media-based non-fungible tokens (NFTs) have soared—both of which are almost entirely based on ethereum’s blockchain.
Web3, the idea a blockchain and crypto-based internet will replace the Silicon Valley-centric web 2.0, has been popularized in recent months by Facebook’s Mark Zuckerberg pivoting his social media giant towards the “metaverse” and huge venture capital investment from the likes of Andreessen Horowitz.
Rivals to ethereum—Binance’s BNB, solana, and cardano—have attracted billions of dollars over the last couple of years as traders bet they’ll be able to win market share from ethereum, which is plagued by sky-high fees and painfully slow transaction times.
“Solana prioritizes scalability, but a relatively less decentralized and secure blockchain has trade-offs, illustrated by several network performance issues since inception,” wrote Shah. Solana has suffered a number of outages in recent months that have cast doubt on the blockchain-based network’s ability to scale.
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The solana price has surged 4,000% over the last year, climbing at a far faster clip than the price … [+]
Compared to global payments giant Visa, which processes around 164 billion transactions per year at an average of 1,700 transactions per second (TPS), ethereum is far slower, though solana claims to be able to compete. Ethereum currently handles around 12 transactions per second on its base layer while solana boasts a theoretical limit of 65,000 transactions per second.
“Ethereum prioritizes decentralization and security, but at the expense of scalability, which has led to periods of network congestion and transaction fees that are occasionally larger than the value of the transaction being sent,” wrote Shah, highlighting ethereum’s eye-wateringly high fees.
In December, billionaire crypto investor Mike Novogratz has said he expects the ethereum price to continue outperforming bitcoin—calling ethereum “a technology bet and bitcoin more as a debasement of fiat currency bet.”
Source: https://www.forbes.com/sites/billybambrough/2022/01/13/visa-of-digital-assets-bank-of-america-issues-shock-ethereum-rival-prediction-as-bitcoin-bnb-solana-cardano-and-xrp-suddenly-slide/