Despite the slow pace, the currency should maintain its position as second-place leader in the sector during this upward cycle, according to experts from Estadão Conteúdo
The second digital currency in market value, Ethereum, is not among the protagonists of the crypto world despite a 55% increase in the year. Bitcoin, the first and largest crypto asset, is expected to soar by around 127% in 2024. Solana, which has technological applications similar to the Ethereum blockchain, has jumped by more than 130%.
ETHUSDTPerp2,048.51+2.17%
But despite the relatively muted behavior, the currency should maintain its position as vice-leader in the sector during this bullish cycle, experts point out.
One of the triggers for crypto throughout the year was the start of trading in spot bitcoin exchange-traded funds (ETFs) in the United States in January. Months later, ethereum funds entered the market, but did not attract the same attention.
“The market bet a lot, because it looked at what happened with the bitcoin market, but it was disappointed. In this market, they divide attention and most prefer to stay in bitcoin,” says Beto Fernandes, analyst at the crypto brokerage FoxBit.
He points out that further down the line, with greater investor confidence in exposing themselves to crypto ETFs, exposure to the product linked to Ethereum will grow as a form of diversification.
In other bull cycles, there was a pattern of, first, bitcoin advancing strongly and, after a stabilization of the main crypto asset, the evolution in the value of secondary currencies (altcoins).
At the end of November, when bitcoin was blocked by the psychological resistance of US$ 100 thousand, analysts see that assets considered “platforms” for decentralized finance can now capture market liquidity.
BTCUSDTPerp67,500+1.17%Still yet to take off, ether comfortably occupies the number two position in size. The report ‘Crypto Panorama in Latin America’, prepared by Bitso with data from the first half of this year, revealed that in the region the asset represents, on average, 19% of the assets in users’ portfolios.
Competitor
As a blockchain platform for other decentralized applications, the ethereum network is widely recognized.
Projects that explore technology in the traditional market give preference to the system – an example is Drex, the digital currency of the Central Bank (BC).
The project, which is in its pilot phase, is based on Hyperledger Besu, a private blockchain based on Ethereum. The advantage of being on the same network is that different projects can exchange information more easily. This gives Ethereum an advantage in perpetuating itself as the most widely used system.
However, there are competitors, such as Solana, where transactions are faster. The crypto asset was largely financed by FTX before the American company went bankrupt.
The crypto asset spent a dark period, as it was associated with the company that was involved in fraud, but returned to prominence in 2023.
The Solana blockchain is the most widely used for issuing so-called memecoins (coins created to go viral on social media, purely speculative).
In the current market cycle, this niche market is bubbling, with liquidity in meme coins like Dogecoin and Shiba at an all-time high in the US market, according to analyst firm Kaiko.
“Technologically, Ethereum is much more consolidated than Solana. But the asset started to appreciate a lot because investors saw that the currency was very cheap and decided to bet”, says Fernandes, from FoxBit.
He does not believe, however, that Solana will live up to expectations of being the “Ethereum killer”.
“We can rule out a death of the Ethereum network. Solana is updating itself, it wants to improve flaws in its system, but it is trying to brag. At the same time, there are already robust projects that are even called ‘Solana killers’.”
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