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Ethereum (ETH) Divergence From Bitcoin (BTC) Finally Comes To An End

 
Ethereum (ETH) Divergence From Bitcoin (BTC) Finally Comes To An End
Ethereum / Breaking News / Analytics

Ethereum (ETH) started to diverge from Bitcoin (BTC) around the end of February, 2019. This led to a state of confusion in the market as investors were confused whether to follow ETH/USD or BTC/USD. This was a strong indicator of the disconnect between Bitcoin (BTC) maximalists and altcoin believers. Most Bitcoin (BTC) maximalists believe that all cryptocurrencies apart from Bitcoin (BTC) are scams. Well, if you think about them as cryptocurrencies then yeah, they are a scam. Why? Because Bitcoin (BTC) was created to solve the double spending problem and to create a digital currency that is protected from inflation. So, if projects like Ethereum (ETH) or Litecoin (LTC) have their own cryptocurrencies that can be used to make purchases, then what is the difference between this and fiat? Today it is Litecoin (LTC), Ethereum (ETH) and Bitcoin Cash (BCH) but tomorrow it will be some other cryptocurrency that is hyped up like Zilliqa (ZIL), Eos (EOS) or Tron (TRX).

Now, this is a very valid argument but what Bitcoin (BTC) maximalists fail to see is that those projects are not necessarily Bitcoin (BTC) competitors although some of them like Ripple (XRP) claim to be. This disconnect between Bitcoin (BTC) and altcoin believers runs very deep. It would thus not be surprising to see Bitcoin (BTC) break away from the altcoin market sometime in the future. This would formalize the disconnect between the two and finally assign to them the different markets that they need. Bitcoin (BTC) and Ethereum (ETH) were never meant to be in the same market. Both of them may use blockchain technology but they are not the same. Bitcoin (BTC) is more like digital gold whereas Ethereum (ETH) is more like a stock.

The divergence that we saw in Bitcoin (BTC) and Ethereum (ETH) is not easy to ignore. Around Feb 24, 2019 we saw BTC/USD rise in an ascending channel whereas ETH/USD declined during the same time. Between March 04 and March 09 people started talking about it and the divergence eventually ended and both are now on the same page. Bitcoin (BTC) and Ethereum (ETH) might be trading the same way for now but we do not expect this to last for long especially when the market evolves. We are still too early in this market. Whenever Bitcoin (BTC) and Ethereum (ETH) goes up, we see even the most useless of altcoins rise in price.

If we think about this, the same cannot be expected in the stock market. When the S&P 500 rises, we do not expect every small cap company to start rising. There are some that profit off the rise if they are already doing good but those that are not doing well do not rise. In other words, all stocks are valued on their own merits and demerits instead of the movements of the bigger market. This way, we could see Ethereum (ETH) move on its own when the market matures.

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