Ethereum, the second-largest cryptocurrency behind bitcoin, has surpassed bitcoin in terms of daily active addresses on its network for the first time.
According to crypto analytics firm Santiment, Ethereum had just over 750,00 active addresses as of Friday, 50,000 more than bitcoin. Meanwhile, according to statistics from Bitinfocharts, the total number of active bitcoin addresses has decreased by 38% in the last three months, which might be interpreted as a gloomy indicator for the bitcoin price.
“Altcoins came to play on a day that saw history be made with ethereum topping bitcoin in daily active addresses for the first time,” crypto analytics firm Santiment wrote with the data on Twitter.
As long-awaited upgrades get underway and banks begin experimenting with decentralized finance (DeFi), which uses crypto technology to recreate financial products such as loans and insurance and is mostly built on top of ethereum’s blockchain, the ethereum price has outperformed bitcoin by a factor of three over the last 12 months. Meanwhile, the non-fungible token (NFT) craze, which has seen all sorts of memes, digital artwork, tweets, and YouTube videos sold via ethereum’s blockchain, has boosted ethereum demand even more.
Last month, the chief investment officer of Two Prime, a $100 million digital asset investment firm, said that ethereum would one day “flip” bitcoin, predicting that “Ethereum’s utility alone will transcend anything else.”
The DeFi bubble, which has seen the prices of ethereum rivals like cardano, Binance’s BNB, polkadot, and solana skyrocket by thousands of percent, comes as ethereum makes the long-awaited switch from bitcoin’s proof-of-work validation process to the more energy-efficient proof-of-stake model.
In a report first reported by Forbes this week, Wall Street powerhouse JPMorgan forecasted that ethereum’s transition to proof-of-stake could accelerate crypto adoption and help generate $40 billion in value by 2025.
“Staking not only lowers the opportunity cost of owning cryptocurrencies vs other asset classes, but it also pays a considerable nominal and real yield in many circumstances,” JPMorgan analysts noted.