Ether Could Outperform Bitcoin With Upgrades, DeFi Usage: Pantera Capital

Ethereum 2.0 is scheduled to go live on Wednesday, August 4 with EIP 1559 upgrade.

Ether Could Outperform Bitcoin With Upgrades, DeFi Usage: Pantera Capital

Ether's market capitalisation was around $306 billion (roughly Rs. 22,73,240 crores) on Monday

Highlights
  • Migration to Ethereum 2.0 will reduce Ether's mining energy use
  • The blockchain's use in DeFi applications will also support prices
  • EIP-1559 is a software upgrade

The Ethereum platform's potential applications, lower environmental impact and technical upgrades are likely to help the ether token continue to outperform Bitcoin, Pantera Capital CEO Dan Morehead said.

As a more recent token, Ether has further to run than Bitcoin, Morehead told the Reuters Global Markets Forum on Monday, adding that the latest Ethereum Improvement Proposal (EIP) 1559 upgrade will help it trade more like a fixed asset. Bitcoin price in India stood at Rs. 28.5 lakhs and Ethereum price in India stood at Rs. 1.84 lakhs as of 3pm IST on August 2.

"You'll see a transition of people who want to store wealth, doing it in (ether) rather than just Bitcoin," he added.

Scheduled to go live Wednesday, EIP 1559 significantly changes how transactions are processed on the Ethereum blockchain as well as reduces supply of the Ether token.

Migration to the upgraded "Ethereum 2.0" will reduce Ether's mining energy use compared with Bitcoin's large carbon footprint, Morehead said.

The blockchain's use in decentralised finance (DeFi) applications will also support prices, he added.

Ether, the world's second-largest cryptocurrency, has more than doubled its price in 2021 to its Monday close of $2,608 (roughly Rs. 1.9 lakhs), compared with Bitcoin's rise of 46 percent to $39,166 (roughly Rs. 29 lakhs).

Ether's market capitalisation was around $306 billion (roughly Rs. 22,73,240 crores) on Monday, less than half of Bitcoin's $737 billion (roughly Rs. 54,75,100 crores), according to tracker CoinGecko.com.

Morehead sees Bitcoin ending 2021 between $80,000 (roughly Rs. 59.4 lakhs) and $90,000 (roughly Rs. 66.8 lakhs), and rising above $120,000 (roughly Rs. 89 lakhs) within a year. Increased mainstream adoption could push it as high as $700,000 (roughly Rs. 5 crores) in the next decade, he said.

Despite recent volatility that left Bitcoin 40 percent below its April all-time high of $64,895 (roughly Rs. 48 lakhs), Morehead said Pantera Capital's funds have attracted institutional investors who are less "momentum"-oriented than retail investors, and see current prices as a buying opportunity.

He also sees increased regulatory scrutiny, such as a global crackdown on cryptocurrency exchange Binance, as a "transition" phase.

Pantera, which manages $2.8 billion (roughly Rs. 20,810 crores) in blockchain-related assets, has invested in several crypto exchanges including Bitstamp, Coinbase,, and regional exchanges such as Mexico-based Bitso.

© Thomson Reuters 2021


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