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Ask HN: Why is Bitcoin rising but ethereum remaining stagnant?

48 points by aecorredor 9y ago

romanovcode 9y ago
Because Etherium is altcoin while BTC is the main one.
celticninja 9y ago
Ethereum has no defined use case, bitcoin is at the least a store of value. ETH is no different to LTC, NMC or any of the myriad other alt coins. You would be better asking why LTC is stagnant rather than ETH. Further ETH is an unlimited coin so it could never see the scarcity that BTC has built in to it.
- jklein11 9y ago
  How is Ethereum less of a store of value than Bitcoin?
  - FreeCrypto 9y ago
    The most apparent reason is that ETH does not have a set supply cap, whereas BTC is 21,000,000.
- fernandopj 9y ago
  Two use cases: 1) Smart contracts (currently the most used blockchain to run one); 2) New tokens/cryptocoin (most used blockchain to run ICOs). Disagree with Ethereum value proposition/implementation all you want, but saying "there's no defined use case" is nonsense.
  - celticninja 9y ago
    Smart contracts have not exactly been successful as far as I can see. the biggest news in ETH was the fork to ETC and the reasons behind it. Combined with the limitless supply it means it will never be worth more than bitcoin.
    - celticninja 9y ago
      also ICOs seem to be the newest fraud on the block, thats not ETHs problem, just like darknet market use wasnt BTC's problem, but the 2 use cases you have provided are not shining examples. I agree it has some potential uses but its main uses have to date been quite flawed. It would need to restore confidence in its uses before it attracts some serious interest.
Sevii 9y ago
There is a fork coming up, people are hoping to profit off of both chains.
psion_ 9y ago
Firstly Ethereum could only be considered "stagnant" from a price perspective as a great deal of development is definitely ongoing. So a better question might be: why is Ethereum not experiencing the same levels of hype and price growth as Bitcoin right now? My guess would be that rising ICO anxiety is causing enough flight from Ether to other currencies to suppress any hype-induced price bumps.
- saas_co_de 9y ago
  After an ICO the companies have to start cashing out Ether to fund their business plans so the success of ICOs puts downward pressure on Ether unless the ICOs are successful enough to bring new money into the ecosystem. The ICO craze seems to have peaked and to be in rapid decline now with many governments cracking down or threatening to crack down on fraud so it is doubtful that ICOs can really bring new money to the table at this point. The other big question on Ether (for me) is the talk about going from proof-of-work to proof-of-stake. That sounds like something that would sharply cut the price of Ether, which is good if you want the network to actually be useful, but bad if you are a speculator.
  - Mouse47 9y ago
    >The other big question on Ether (for me) is the talk about going from proof-of-work to proof-of-stake. That sounds like something that would sharply cut the price of Ether, which is good if you want the network to actually be useful, but bad if you are a speculator. Why is that? I'm pretty uninformed on this stuff...I get that POS basically replaces risk via electricity cost with risk via an Ether stake...but I don't get how it changes the supply or demand...
- krisives 9y ago
  Also some of the "ICO high" is wearing off as reality sets in (some ICOs are garbage) and regulation begins.
mbrock 9y ago
Why did a red and blue colored canvas by Mark Rothko sell for 75 million dollars? Memes are weird and money is even weirder.
- r0fl 9y ago
  Easy way to launder $75,000,000 out of China by buying the canvas, transporting it out of China and then selling it. That's why it's worth $75,000,000.
  - deleted 9y ago
    [deleted]
  - solotronics 9y ago
    I find it odd that everyone thinks Chinese money laundering is the source of high valuations and not unprecedented amounts of central bank money creation. It is a function of their own efforts to devalue their currency more than the foreign ones so that they stay competitive exporting. Bubbles all around.
Top19 9y ago
I would say brand recognition among amateur investors. Amateur investors, just like in the dot-com era, drive huge upsurges in prices, and tend to be indicative of the late stages of a bubble. Even Richard Shiller though, a really brilliant economist, does not even try to attempt when bubbles will "pop", but a good rule of thumb is they don't last longer than 10 years. It's hard to argue when this all started, but if you date the rise of the "start-up era" (which I am lumping in here with bitcoin) to say 2010, that gives you about 2 years max. BTW this was all very common in the 90's with the rise of day-trading. People would literally give a company 50k and they'd be given a terminal at some rent-a-office to start trading (but with their own money not the firm's!!!). One guy lost so much money, he killed as many people as Columbine: https://en.wikipedia.org/wiki/Mark_O._Barton https://en.wikipedia.org/wiki/Mark_O._Barton. I wonder if this will happen again.
vita17 9y ago
Ethereum is stagnant because it's no longer profitable to mine with a GPU as it was during the summer. Bitcoin is rising because it's about to fork.
- mizzack 9y ago
  Still plenty profitable to mine if you already have a rig. A 6 card RX470/480 setup will gross about $9/day.
  - Lon7 9y ago
    Even with a rig like that it will take around 10 months to break even. Ethereum will be moving to proof of stake in the future. There is no set date but it could be in approximately 1 year. At that point all these gpu rigs will need to switch to other less profitable cryptocurrencies. We're reaching the point where it may not be possible to break even before Ethereum switches to proof of stake. Consequently, it's recently become easier and cheaper to buy gpus suited to mining.
    - jacobush 9y ago
      Yes, and the communists were going to turn over the power to the people. Any year now. Edit: downvoted. I want to make myself clear - how will ETH switch over to proof of stake, when people have so much invested in mining hardware? It won't be pretty. Another fork or two perhaps?
      - sctb 9y ago
        Please just post the meaningful comment instead of unsubstantive flamebait to begin with. You've been posting a lot of that and we need it to improve. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
        jacobush 9y ago
        OK
vessenes 9y ago
I’ve been watching this actively, and have a few theories: The last major forks (ETH:ETC, BTC:BCH) both created net positive value; that is, the total value held after the split was greater than the value of a single chain. So, I think the so-called ‘smart’ money ahead of the fork has been to buy BTC, since history seems to show it will be worth more post-fork. Fork looks more likely -> more buying. And of course the rising price creates its own momentum. There are three general outcomes from the fork: one or the other side ‘wins’, and there’s a shit-chain spawned, or they both coexist. In the coexist world, we have a pretty interesting set of market moves ahead; if the debate is as divisive as it looks on twitter, then the whole crypto world will be holding ‘shit coins’, but not ones others think are shit, along with their preferred fork. It seems possible that they may turn some of those into Ethereum, and it seems likely to me that some traders will ‘get back’ to Ethereum post-fork; all those would indicate some cautious optimism about ETH prices later this fall. And of course if BTC just totally nukes itself, then I think you’d see a major flippening back to ETH.
- panarky 9y ago
  1) The gargantuan Chicago Mercantile Exchange says they'll start trading futures contracts on Bitcoin later this year. 2) There's a "flight to safety" quality to Bitcoin. It's proven secure in the face of 9 years of constant attacks. Ethereum is newer and not as proven yet. 3) Bitcoin has a much more powerful mining network, currently cranking 10 exahashes per second and growing fast. Ethereum is at 100 terahashes per second (about 100,000 times less), and growing slowly. 4) Bitcoin is scarce and deflationary. Ethereum is abundant and inflationary.
  - mrfusion 9y ago
    Why is it inflationary?
    - panarky 9y ago
      The bitcoin network rewards miners with 12.5 new BTC every 10 minutes or so (~1,800 per day). The ethereum network rewards miners with 5 new ETH approximately every 15 to 30 seconds (~18,000 per day). Bitcoin's total supply is now about 17 million BTC, and will never exceed 21 million BTC. Ethereum's total supply is now about 96 million ETH with no upper limit.
fernandopj 9y ago
I'd say two things at this point in time: 1) All-time high, it's pre-fork time, Bitcoin is still a long position, so people who have a lot of cryptocoins are trying to expand their portfolio BTC %. And all new investors are coming to BTC. ETH, like every other altcoin right now, is being traded in favor of BTC, so no way value will go up pre-B2X. 2) ICO banning, regulations, and general uncertainty at new coins make Ethereum & ETH, as far as price speculation goes, a less favorable proposition, since its speculative driver (ETH for ICO) lost momentum. IMHO it's remarkable the ETH/USD price is still stable, hovering at US$300.
onecooldev24 9y ago
Cause ETH requires all the servers to process a single transaction to validate it. The tech makes no sense.
sharemywin 9y ago
Does nicehash have an effect on how alt coins are priced compared to bitcoin. It's a market where you mine altcoins for bitcoins. Not sure how large it is, but wondered if it was affecting the relation to prices.
rudiger 9y ago
Supply and demand. There is no limit on the supply of ETH, whereas there will only ever be 21 million bitcoins in existence. It doesn't make sense to speculate on the price of ETH, because it's never going to be scarce. Even the current price of ETH makes no sense, except you need it to buy into ICOs.
- victorquinn 9y ago
  "It doesn't make sense to speculate on the price of ETH, because it's never going to be scarce." This is totally not true. I hate seeing people post FUD like this about ETH. It does not grow unbounded. Here's a post from Vitalik himself describing it in more detail https://www.reddit.com/r/ethereum/comments/5izcf5/lets_talk_about_the_projected_coin_supply_over/ https://www.reddit.com/r/ethereum/comments/5izcf5/lets_talk_...
  - RaleyField 9y ago
    > I hate seeing people post FUD I hate people accusing others of spreading FUD. What happened to people being simply mistaken? Do you have any proof his or her ill intent?
    - victorquinn 9y ago
      Fair point but when someone says "X will never ..." as a justification for it not meeting that qualification and there being no evidence that their assertion is true, there is either (a) a fundamental misunderstanding of X or (b) malicious intent. I don't think suggesting FUD is explicitly saying that (b) is present, it could well be (a) but if that's the case it is still harmful and one can spread FUD without the malice. But it is reckless and irresponsible to state something which is simply not true as if it were fact. This is a problem in our current world and one which has run rampant and I think it is necessary, particularly in forums such as this, to question the assertion of unverified facts.
- bfrog 9y ago
  Kind of like there will only ever be 1 million pixels http://www.milliondollarhomepage.com/ http://www.milliondollarhomepage.com/ I'm just a tiny bit bearish on digital currency.
bbarn 9y ago
Because the people buying it and driving up the price don't care about block chain or alternate economics or anything like that. It looks like stock that keeps going up. Plenty of people are buying it purely as an investment.
readhn 9y ago
Getting my pop corn ready for first at least a 50% hair cut on BTC value.
- icelancer 9y ago
  You and everyone else predicting it since it was $200.
  - readhn 9y ago
    The mania phase is pretty clear here. What goes up like that must come down. It's simple as that. Study currencies, stocks and commodities price histories before and after they entered parabolic phases. Nothing lasts forever.
    - icelancer 9y ago
      >>Study currencies, stocks and commodities price histories before and after they entered parabolic phases. Nothing lasts forever. Right. Except the ones that do. And even if you correctly predict that BTC is going to collapse... when? At $2000? At $5000? At $7100? Are you doing anything to bet on it by shorting it? Or are you just prognosticating and trying to timestamp a comment so in [x] months/years you might be able to link back to Hacker News and say: "A-ha! I knew it," ignoring all the other predictions you may or may not have made that didn't come true. It's easy to say BTC is going to collapse. A lot harder to have some conviction behind it and act.
  - wakamoleguy 9y ago
    The last time Bitcoin was priced under $200 was in January of 2015. You're correct that it hasn't experienced a drop of 50% at any point since then. On the other hand, Bitcoin was also priced under $200 just over a year earlier, in November 2013. In December 2013 it spiked over $1000 before crashing. The $200 in January 2015 is where it eventually stabilized. This doesn't invalidate your comment, by any means, but it does illustrate that such a collapse is not out of the realm of possibility. (All prices sourced from https://www.coindesk.com/price/ https://www.coindesk.com/price/)
krisives 9y ago
Because BTC has had many changes in available supply. With BCH and 2X a lot of people that otherwise would happily hold their coins in cold storage have been "forced" into moving their coins around for "flippening" of the forked coins. Also consider that a very large amount of coins was seized when BTC-E (corrupt exchange working with criminals) and AlphaBay (defunct darknet drug website) were shutdown around the same time. It's not just the capital that was seized (and is still be processed by many governments that co-operated) but also the flow of money that was interrupted.
indubitable 9y ago
I think there's a straight forward explanation. Bitcoin has fundamentally proven its stability this year. It's already had one fork and China cracking down on it hard. It was a major test for Bitcoin and the net result was Bitcoin came out literally stronger than ever after a drop that was, in hindsight, just a blip. If that news didn't trigger a devastating sell off it's somewhat difficult to imagine what would. Another key point is that Bitcoin also has inherent value as a currency. You can pay for things easily and quickly directly with Bitcoin in an increasing number of places. Should somewhere like Amazon decide to start directly accepting Bitcoin, the price would go through the roof. And one more debatable issue is that Bitcoin is in a way a sort of metronome or heartbeat for cryptocurrencies as a whole. Almost like a reserve currency. If Bitcoin fails, it would likely have a devastating ripple effect throughout the entire crypto community. "If Bitcoin fail - anything can fail." is something that would likely be uttered rapidly in response to any other crypto. So an investment in Bitcoin can in a way be seen as an abstract investment in cryptocurrency itself. If you accept this, then the corollary is that other coins are indirectly marked against Bitcoin. So you would be implicitly taking on additional risk for unclear gains.
libovness 9y ago
No different than asking "Why is the internet service Facebook growing but the internet service Twitter isn't?" or "Why did the internet website Facebook grow but the internet website WebVan didn't?" Bitcoin and Ethereum serve different purposes (a store of value and maybe a currency vs. a computing platform, respectively).
richardknop 9y ago
More people are buying bitcoin than ethereum. Therefor the price goes up faster. Supply / demand.
rafiki6 9y ago
Not a very scientific theory, and not much collected evidence but based on my observations Bitcoin get's much more press, more people know about it and want to buy it. It's all very speculative. To say 1 bitcoin is worth 7000 USD is the same as saying I can manage to sell all my bitcoin for that much which is likely not the case. As with all assets, the moment a major player loses confidence and signals such in the market, there will be a sell off and major crash in the value. EDIT: anectodal evidence, this week more than 10 non-tech people who ask me for investing advice asked "should i buy bitcoin". The moment non-experts begin to ask if they should be buying something is generally a good signal that something is bubbling
paulgb 9y ago
I'm surprised nobody has mentioned the CME news: http://www.cmegroup.com/media-room/press-releases/2017/10/31/cme_group_announceslaunchofbitcoinfutures.html/ http://www.cmegroup.com/media-room/press-releases/2017/10/31... (My own explanation is that it's all a big speculative bubble and price moves are essentially momentum on top of noise, but nobody came here to read that :))
- brianbreslin 9y ago
  I understand how Futures work in commodities. Can you give me a TLDR primer on how this works for currencies?
  - panarky 9y ago
    Just like any other cash-settled commodity. http://www.cmegroup.com/media-room/press-releases/2017/10/31/cme_group_announceslaunchofbitcoinfutures.html http://www.cmegroup.com/media-room/press-releases/2017/10/31...
bmcusick 9y ago
My theory is that ETH is a useful medium of exchange for buying compute resources from "the world computer", but BTC is better as a store of value. And the dollar continues to be better than both of them as a unit of account. Basically, competing forms of money are breaking down into specialized kinds of money. Automatic atomic swaps between blockchains will make the specialization even more obvious over time.
andrewla 9y ago
It's meaningless to speculate on these short-term price movements. There's a possibility that the pricing is being determined by macroeconomic forces, but then it seems like you'd see price movement in traditional commodities as well (like gold) and we're not seeing that. In all likelihood this is the combination of some set of factors -- the CME group's involvement or more people looking to enter the market, etc., and Bitcoin's preeminence in the cryptocurrency space. There's the movement of Bitcoin Cash, which is going up at an even faster clip (now) after stagnated for a while after the post-fork excitement. This is not obviously connected to any of the CME-based news. Most likely is that each coin is acting somewhat independently. As much as you can say that Ethereum is stagnating, it's not stagnating any more than Bitcoin was a year or so ago. Only time will tell if the current pricing changes are reflecting some deeper reality, but I'd hesitate before attributing anything like that until we have more information.
muzani 9y ago
Market value is based mostly on emotion. A lot of people buying into the hype have heard of BTC, but not as many have heard of ETH. People are mostly buying it to resell it. BTC price goes up because BTC price is going up. ETH price is not going up because it's not going up. Sometimes the inferior technology wins too as long as it's been adopted more widely. Cryptocurrency value is based heavily on network effects.
sandGorgon 9y ago
This is my theory - Proof of Stake. Ethereum is going to hard fork (whenever they can figure out) to a proof of stake model - CASPER. https://www.coindesk.com/shifting-changing-ethereums-casper-code-takes-shape/ https://www.coindesk.com/shifting-changing-ethereums-casper-... This means that there is no serious investment on the farm side of things. No chinese miners running to invest millions of dollars to build mining farms. To a large extent ETH is centralized in its stewardship through Buterin. So, the whole ecosystem is holding its collective breath. The next phase of growth (or fall) will only come after CASPER.
xiphias 9y ago
Ethereum just had a hard fork where a ,,quick patch'' for a bug was created 2 days before the fork. The developers didn't agree if there should be a hard fork or no at that point. I would never put my money on a system like this, and I would never roll out a system like this where I can make tens of billions of dollars of damage so easily. Also people who were using an official Ethereum multi-sig wallet to be extra safe lost real money, because the devs don't even bother testing the smart contracts that they provide (while Bitcoin devs just created a language from ground up that allows proving properties of smart contracts)
emerged 9y ago
Bitcoin is still the word most strongly associated with blockchain. So whenever someone wants to make money off that new blockchain thing Chad made a million buying, they default to Bitcoin. Then Phil and Susie also made money since Tammy and Jeff bought in as well, so Tom and Jennifer buy it too. Etc.

48 points by aecorredor 9y ago

Because Etherium is altcoin while BTC is the main one.

Ethereum has no defined use case, bitcoin is at the least a store of value. ETH is no different to LTC, NMC or any of the myriad other alt coins. You would be better asking why LTC is stagnant rather than ETH. Further ETH is an unlimited coin so it could never see the scarcity that BTC has built in to it.

jklein11 9y ago
How is Ethereum less of a store of value than Bitcoin?
- FreeCrypto 9y ago
  The most apparent reason is that ETH does not have a set supply cap, whereas BTC is 21,000,000.
fernandopj 9y ago
Two use cases: 1) Smart contracts (currently the most used blockchain to run one); 2) New tokens/cryptocoin (most used blockchain to run ICOs). Disagree with Ethereum value proposition/implementation all you want, but saying "there's no defined use case" is nonsense.
- celticninja 9y ago
  Smart contracts have not exactly been successful as far as I can see. the biggest news in ETH was the fork to ETC and the reasons behind it. Combined with the limitless supply it means it will never be worth more than bitcoin.
  - celticninja 9y ago
    also ICOs seem to be the newest fraud on the block, thats not ETHs problem, just like darknet market use wasnt BTC's problem, but the 2 use cases you have provided are not shining examples. I agree it has some potential uses but its main uses have to date been quite flawed. It would need to restore confidence in its uses before it attracts some serious interest.

Sevii 9y ago

There is a fork coming up, people are hoping to profit off of both chains.

psion_ 9y ago

Firstly Ethereum could only be considered "stagnant" from a price perspective as a great deal of development is definitely ongoing. So a better question might be: why is Ethereum not experiencing the same levels of hype and price growth as Bitcoin right now? My guess would be that rising ICO anxiety is causing enough flight from Ether to other currencies to suppress any hype-induced price bumps.

saas_co_de 9y ago
After an ICO the companies have to start cashing out Ether to fund their business plans so the success of ICOs puts downward pressure on Ether unless the ICOs are successful enough to bring new money into the ecosystem. The ICO craze seems to have peaked and to be in rapid decline now with many governments cracking down or threatening to crack down on fraud so it is doubtful that ICOs can really bring new money to the table at this point. The other big question on Ether (for me) is the talk about going from proof-of-work to proof-of-stake. That sounds like something that would sharply cut the price of Ether, which is good if you want the network to actually be useful, but bad if you are a speculator.
- Mouse47 9y ago
  >The other big question on Ether (for me) is the talk about going from proof-of-work to proof-of-stake. That sounds like something that would sharply cut the price of Ether, which is good if you want the network to actually be useful, but bad if you are a speculator. Why is that? I'm pretty uninformed on this stuff...I get that POS basically replaces risk via electricity cost with risk via an Ether stake...but I don't get how it changes the supply or demand...
krisives 9y ago
Also some of the "ICO high" is wearing off as reality sets in (some ICOs are garbage) and regulation begins.

mbrock 9y ago

Why did a red and blue colored canvas by Mark Rothko sell for 75 million dollars? Memes are weird and money is even weirder.

r0fl 9y ago
Easy way to launder $75,000,000 out of China by buying the canvas, transporting it out of China and then selling it. That's why it's worth $75,000,000.
- deleted 9y ago
  [deleted]
- solotronics 9y ago
  I find it odd that everyone thinks Chinese money laundering is the source of high valuations and not unprecedented amounts of central bank money creation. It is a function of their own efforts to devalue their currency more than the foreign ones so that they stay competitive exporting. Bubbles all around.

Top19 9y ago

I would say brand recognition among amateur investors. Amateur investors, just like in the dot-com era, drive huge upsurges in prices, and tend to be indicative of the late stages of a bubble. Even Richard Shiller though, a really brilliant economist, does not even try to attempt when bubbles will "pop", but a good rule of thumb is they don't last longer than 10 years. It's hard to argue when this all started, but if you date the rise of the "start-up era" (which I am lumping in here with bitcoin) to say 2010, that gives you about 2 years max. BTW this was all very common in the 90's with the rise of day-trading. People would literally give a company 50k and they'd be given a terminal at some rent-a-office to start trading (but with their own money not the firm's!!!). One guy lost so much money, he killed as many people as Columbine: https://en.wikipedia.org/wiki/Mark_O._Barton https://en.wikipedia.org/wiki/Mark_O._Barton. I wonder if this will happen again.

vita17 9y ago

Ethereum is stagnant because it's no longer profitable to mine with a GPU as it was during the summer. Bitcoin is rising because it's about to fork.

mizzack 9y ago
Still plenty profitable to mine if you already have a rig. A 6 card RX470/480 setup will gross about $9/day.
- Lon7 9y ago
  Even with a rig like that it will take around 10 months to break even. Ethereum will be moving to proof of stake in the future. There is no set date but it could be in approximately 1 year. At that point all these gpu rigs will need to switch to other less profitable cryptocurrencies. We're reaching the point where it may not be possible to break even before Ethereum switches to proof of stake. Consequently, it's recently become easier and cheaper to buy gpus suited to mining.
  - jacobush 9y ago
    Yes, and the communists were going to turn over the power to the people. Any year now. Edit: downvoted. I want to make myself clear - how will ETH switch over to proof of stake, when people have so much invested in mining hardware? It won't be pretty. Another fork or two perhaps?
    - sctb 9y ago
      Please just post the meaningful comment instead of unsubstantive flamebait to begin with. You've been posting a lot of that and we need it to improve. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
      - jacobush 9y ago
        OK

vessenes 9y ago

I’ve been watching this actively, and have a few theories: The last major forks (ETH:ETC, BTC:BCH) both created net positive value; that is, the total value held after the split was greater than the value of a single chain. So, I think the so-called ‘smart’ money ahead of the fork has been to buy BTC, since history seems to show it will be worth more post-fork. Fork looks more likely -> more buying. And of course the rising price creates its own momentum. There are three general outcomes from the fork: one or the other side ‘wins’, and there’s a shit-chain spawned, or they both coexist. In the coexist world, we have a pretty interesting set of market moves ahead; if the debate is as divisive as it looks on twitter, then the whole crypto world will be holding ‘shit coins’, but not ones others think are shit, along with their preferred fork. It seems possible that they may turn some of those into Ethereum, and it seems likely to me that some traders will ‘get back’ to Ethereum post-fork; all those would indicate some cautious optimism about ETH prices later this fall. And of course if BTC just totally nukes itself, then I think you’d see a major flippening back to ETH.

panarky 9y ago
1) The gargantuan Chicago Mercantile Exchange says they'll start trading futures contracts on Bitcoin later this year. 2) There's a "flight to safety" quality to Bitcoin. It's proven secure in the face of 9 years of constant attacks. Ethereum is newer and not as proven yet. 3) Bitcoin has a much more powerful mining network, currently cranking 10 exahashes per second and growing fast. Ethereum is at 100 terahashes per second (about 100,000 times less), and growing slowly. 4) Bitcoin is scarce and deflationary. Ethereum is abundant and inflationary.
- mrfusion 9y ago
  Why is it inflationary?
  - panarky 9y ago
    The bitcoin network rewards miners with 12.5 new BTC every 10 minutes or so (~1,800 per day). The ethereum network rewards miners with 5 new ETH approximately every 15 to 30 seconds (~18,000 per day). Bitcoin's total supply is now about 17 million BTC, and will never exceed 21 million BTC. Ethereum's total supply is now about 96 million ETH with no upper limit.

fernandopj 9y ago

I'd say two things at this point in time: 1) All-time high, it's pre-fork time, Bitcoin is still a long position, so people who have a lot of cryptocoins are trying to expand their portfolio BTC %. And all new investors are coming to BTC. ETH, like every other altcoin right now, is being traded in favor of BTC, so no way value will go up pre-B2X. 2) ICO banning, regulations, and general uncertainty at new coins make Ethereum & ETH, as far as price speculation goes, a less favorable proposition, since its speculative driver (ETH for ICO) lost momentum. IMHO it's remarkable the ETH/USD price is still stable, hovering at US$300.

onecooldev24 9y ago

Cause ETH requires all the servers to process a single transaction to validate it. The tech makes no sense.

sharemywin 9y ago

Does nicehash have an effect on how alt coins are priced compared to bitcoin. It's a market where you mine altcoins for bitcoins. Not sure how large it is, but wondered if it was affecting the relation to prices.

rudiger 9y ago

Supply and demand. There is no limit on the supply of ETH, whereas there will only ever be 21 million bitcoins in existence. It doesn't make sense to speculate on the price of ETH, because it's never going to be scarce. Even the current price of ETH makes no sense, except you need it to buy into ICOs.

victorquinn 9y ago
"It doesn't make sense to speculate on the price of ETH, because it's never going to be scarce." This is totally not true. I hate seeing people post FUD like this about ETH. It does not grow unbounded. Here's a post from Vitalik himself describing it in more detail https://www.reddit.com/r/ethereum/comments/5izcf5/lets_talk_about_the_projected_coin_supply_over/ https://www.reddit.com/r/ethereum/comments/5izcf5/lets_talk_...
- RaleyField 9y ago
  > I hate seeing people post FUD I hate people accusing others of spreading FUD. What happened to people being simply mistaken? Do you have any proof his or her ill intent?
  - victorquinn 9y ago
    Fair point but when someone says "X will never ..." as a justification for it not meeting that qualification and there being no evidence that their assertion is true, there is either (a) a fundamental misunderstanding of X or (b) malicious intent. I don't think suggesting FUD is explicitly saying that (b) is present, it could well be (a) but if that's the case it is still harmful and one can spread FUD without the malice. But it is reckless and irresponsible to state something which is simply not true as if it were fact. This is a problem in our current world and one which has run rampant and I think it is necessary, particularly in forums such as this, to question the assertion of unverified facts.
bfrog 9y ago
Kind of like there will only ever be 1 million pixels http://www.milliondollarhomepage.com/ http://www.milliondollarhomepage.com/ I'm just a tiny bit bearish on digital currency.

bbarn 9y ago

Because the people buying it and driving up the price don't care about block chain or alternate economics or anything like that. It looks like stock that keeps going up. Plenty of people are buying it purely as an investment.

readhn 9y ago

Getting my pop corn ready for first at least a 50% hair cut on BTC value.

icelancer 9y ago
You and everyone else predicting it since it was $200.
- readhn 9y ago
  The mania phase is pretty clear here. What goes up like that must come down. It's simple as that. Study currencies, stocks and commodities price histories before and after they entered parabolic phases. Nothing lasts forever.
  - icelancer 9y ago
    >>Study currencies, stocks and commodities price histories before and after they entered parabolic phases. Nothing lasts forever. Right. Except the ones that do. And even if you correctly predict that BTC is going to collapse... when? At $2000? At $5000? At $7100? Are you doing anything to bet on it by shorting it? Or are you just prognosticating and trying to timestamp a comment so in [x] months/years you might be able to link back to Hacker News and say: "A-ha! I knew it," ignoring all the other predictions you may or may not have made that didn't come true. It's easy to say BTC is going to collapse. A lot harder to have some conviction behind it and act.
- wakamoleguy 9y ago
  The last time Bitcoin was priced under $200 was in January of 2015. You're correct that it hasn't experienced a drop of 50% at any point since then. On the other hand, Bitcoin was also priced under $200 just over a year earlier, in November 2013. In December 2013 it spiked over $1000 before crashing. The $200 in January 2015 is where it eventually stabilized. This doesn't invalidate your comment, by any means, but it does illustrate that such a collapse is not out of the realm of possibility. (All prices sourced from https://www.coindesk.com/price/ https://www.coindesk.com/price/)

krisives 9y ago

Because BTC has had many changes in available supply. With BCH and 2X a lot of people that otherwise would happily hold their coins in cold storage have been "forced" into moving their coins around for "flippening" of the forked coins. Also consider that a very large amount of coins was seized when BTC-E (corrupt exchange working with criminals) and AlphaBay (defunct darknet drug website) were shutdown around the same time. It's not just the capital that was seized (and is still be processed by many governments that co-operated) but also the flow of money that was interrupted.

indubitable 9y ago

I think there's a straight forward explanation. Bitcoin has fundamentally proven its stability this year. It's already had one fork and China cracking down on it hard. It was a major test for Bitcoin and the net result was Bitcoin came out literally stronger than ever after a drop that was, in hindsight, just a blip. If that news didn't trigger a devastating sell off it's somewhat difficult to imagine what would. Another key point is that Bitcoin also has inherent value as a currency. You can pay for things easily and quickly directly with Bitcoin in an increasing number of places. Should somewhere like Amazon decide to start directly accepting Bitcoin, the price would go through the roof. And one more debatable issue is that Bitcoin is in a way a sort of metronome or heartbeat for cryptocurrencies as a whole. Almost like a reserve currency. If Bitcoin fails, it would likely have a devastating ripple effect throughout the entire crypto community. "If Bitcoin fail - anything can fail." is something that would likely be uttered rapidly in response to any other crypto. So an investment in Bitcoin can in a way be seen as an abstract investment in cryptocurrency itself. If you accept this, then the corollary is that other coins are indirectly marked against Bitcoin. So you would be implicitly taking on additional risk for unclear gains.

libovness 9y ago

No different than asking "Why is the internet service Facebook growing but the internet service Twitter isn't?" or "Why did the internet website Facebook grow but the internet website WebVan didn't?" Bitcoin and Ethereum serve different purposes (a store of value and maybe a currency vs. a computing platform, respectively).

richardknop 9y ago

More people are buying bitcoin than ethereum. Therefor the price goes up faster. Supply / demand.

rafiki6 9y ago

Not a very scientific theory, and not much collected evidence but based on my observations Bitcoin get's much more press, more people know about it and want to buy it. It's all very speculative. To say 1 bitcoin is worth 7000 USD is the same as saying I can manage to sell all my bitcoin for that much which is likely not the case. As with all assets, the moment a major player loses confidence and signals such in the market, there will be a sell off and major crash in the value. EDIT: anectodal evidence, this week more than 10 non-tech people who ask me for investing advice asked "should i buy bitcoin". The moment non-experts begin to ask if they should be buying something is generally a good signal that something is bubbling

paulgb 9y ago

I'm surprised nobody has mentioned the CME news: http://www.cmegroup.com/media-room/press-releases/2017/10/31/cme_group_announceslaunchofbitcoinfutures.html/ http://www.cmegroup.com/media-room/press-releases/2017/10/31... (My own explanation is that it's all a big speculative bubble and price moves are essentially momentum on top of noise, but nobody came here to read that :))

brianbreslin 9y ago
I understand how Futures work in commodities. Can you give me a TLDR primer on how this works for currencies?
- panarky 9y ago
  Just like any other cash-settled commodity. http://www.cmegroup.com/media-room/press-releases/2017/10/31/cme_group_announceslaunchofbitcoinfutures.html http://www.cmegroup.com/media-room/press-releases/2017/10/31...

bmcusick 9y ago

My theory is that ETH is a useful medium of exchange for buying compute resources from "the world computer", but BTC is better as a store of value. And the dollar continues to be better than both of them as a unit of account. Basically, competing forms of money are breaking down into specialized kinds of money. Automatic atomic swaps between blockchains will make the specialization even more obvious over time.

andrewla 9y ago

It's meaningless to speculate on these short-term price movements. There's a possibility that the pricing is being determined by macroeconomic forces, but then it seems like you'd see price movement in traditional commodities as well (like gold) and we're not seeing that. In all likelihood this is the combination of some set of factors -- the CME group's involvement or more people looking to enter the market, etc., and Bitcoin's preeminence in the cryptocurrency space. There's the movement of Bitcoin Cash, which is going up at an even faster clip (now) after stagnated for a while after the post-fork excitement. This is not obviously connected to any of the CME-based news. Most likely is that each coin is acting somewhat independently. As much as you can say that Ethereum is stagnating, it's not stagnating any more than Bitcoin was a year or so ago. Only time will tell if the current pricing changes are reflecting some deeper reality, but I'd hesitate before attributing anything like that until we have more information.

muzani 9y ago

Market value is based mostly on emotion. A lot of people buying into the hype have heard of BTC, but not as many have heard of ETH. People are mostly buying it to resell it. BTC price goes up because BTC price is going up. ETH price is not going up because it's not going up. Sometimes the inferior technology wins too as long as it's been adopted more widely. Cryptocurrency value is based heavily on network effects.

sandGorgon 9y ago

This is my theory - Proof of Stake. Ethereum is going to hard fork (whenever they can figure out) to a proof of stake model - CASPER. https://www.coindesk.com/shifting-changing-ethereums-casper-code-takes-shape/ https://www.coindesk.com/shifting-changing-ethereums-casper-... This means that there is no serious investment on the farm side of things. No chinese miners running to invest millions of dollars to build mining farms. To a large extent ETH is centralized in its stewardship through Buterin. So, the whole ecosystem is holding its collective breath. The next phase of growth (or fall) will only come after CASPER.

xiphias 9y ago

Ethereum just had a hard fork where a ,,quick patch'' for a bug was created 2 days before the fork. The developers didn't agree if there should be a hard fork or no at that point. I would never put my money on a system like this, and I would never roll out a system like this where I can make tens of billions of dollars of damage so easily. Also people who were using an official Ethereum multi-sig wallet to be extra safe lost real money, because the devs don't even bother testing the smart contracts that they provide (while Bitcoin devs just created a language from ground up that allows proving properties of smart contracts)

emerged 9y ago

Bitcoin is still the word most strongly associated with blockchain. So whenever someone wants to make money off that new blockchain thing Chad made a million buying, they default to Bitcoin. Then Phil and Susie also made money since Tammy and Jeff bought in as well, so Tom and Jennifer buy it too. Etc.