The coin’s value then made a fresh rebound to $50,000 towards the end of August 2021. In a recent tweet made by Mike McGlone, Bloomberg’s commodity strategist, this price may shoot up to $100,000.
According to him, Ethereum is going to be the catalyst behind Bitcoin’s price surge. Mike’s tweet came when the number one crypto traded above $46,000 on August 9, 2021.
Factors that Could Upgrade Bitcoin’s Price Through Ethereum
BTC and ETH usually differ based on the usability features and the holders’ motives for the two assets. On one side, Bitcoiners work as long-term accumulators and holders. Ethereum investors operate as traders who take on the upcoming submarkets.
These differences are what determine the coin’s growth rate. As such, we examine two broad factors that could make Ethereum activate Bitcoin’s race to the $100,000 mark:
In 2020, data from Taha Zafar showed that Bitcoin had a three-month gain of 81%. The readings compare with popular DeFi tokens such as LEND, MKR, KNC, and many more. Thus, Bitcoin can undergo a price change if the DeFi tokens begin to rally.
The idea is a true reflection of the observations made by Kelvin Koh, a partner at the Spartan Group investment fund. According to him, Bitcoin can accumulate significant capital inflows once altcoins achieve frothy prices.
At the same time, most of the altcoins on DeFi trade against Bitcoin and Ethereum instead of the U.S dollar. So, users may need to acquire more BTCs to boost their altcoin returns.
Ethereum’s Blockchain Upgrade
These fees are set to undergo a burning procedure on Ethereum’s network rather than rewarding them to miners. Once the EIP-1559 rolls out, miners can only earn block fees and inclusion charges.
This implementation could drive out users from Ethereum to Bitcoin’s network to search for better mining incomes. Metrics from Clark Moody Bitcoin in February 2021 suggest that miners secure transaction fees worth 0.97 BTC. Going by the current prices, the earnings are equal to $46,971.
Ethereum Outperforms Bitcoin’s Gains
Ethereum continues to display a remarkable performance in 2021. The second-largest crypto saw a price increase of 57% between June 26 and August 25, 2021. Compared to the yearly gains, it is clear that Ethereum is also outperforming Bitcoin’s performance.
As of August 10, 2021, Ethereum’s yearly gains were 323% compared to Bitcoin’s 58.2%. Going by Bloomberg’s predictions, Bitcoin can reach $100,000 if it follows Ethereum’s price performance.
Other Factors Impacting BTC’s Price
Bitcoin’s shift in prices usually follows several events taking place in the crypto market. Notably, these occurrences can either have a positive or negative impact on the coin’s value. Here’s an outlook:
Bitcoin began to feature in the financial market in 2009 to introduce decentralization. Government involvement in the asset’s functionalities can affect Bitcoin’s price movement. China, for instance, is well-known for restricting the use of cryptocurrencies within its boundaries.
Back in 2017, China shut down all domestic cryptocurrency exchanges. Today, the region does not permit financial institutions to conduct any crypto-related services. The ban on mining cryptocurrency is also taking effect as users migrate to other areas to establish new mining posts.
This regulatory pressure limits the flagship crypto’s value from increasing. In June 2021, El Salvador became the first country to accept Bitcoin as a legal tender. This action gives Salvador residents the chance to transact with an anonymous and decentralized economy. In this case, legalizing the use of Bitcoin has a positive effect that can increase the coin’s value.
Sentiments from Icons
The influence of famous moguls is also a significant contributor to the value of Bitcoin. An appropriate case here can be Elon Musk’s remarks on the dominant cryptocurrency. As the head of Tesla, Elon addressed his users on Twitter, stating that his automotive company had plans to accept Bitcoin payments.
In February 2021, he went to the extent of investing in Bitcoin worth $1.5 billion. After the investment news, the digital currency shot from $39,000 to $43,000. The values then began to flop when Elon declined to accept Bitcoin payments in May 2021.
The reason behind the decline was the environmental impact that Bitcoin brings during the mining process. Shortly after the news, BTCs price plunged by 15% within less than 24 hours. Making such remarks causes the digital coin to move either upwards or downwards.
Ethereum can play a vital role in ensuring Bitcoin attains the $100,000 mark. As Ethereum’s DeFi community grows, users can trade Bitcoin against various digital tokens. Removing the miners’ fees on Ethereum could also trigger a migration to Bitcoin’s network and ultimately uplift its price.
Asides from Ethereum’s impact, investors need to remember other contributing factors which may cause rapid price adjustments. While the two assets serve different purposes, the price action of one digital currency could lead to a price change in the other.