Can Bitcoin Compete on Technology?

The Bitcoiner’s Dilemma. Many crypto assets surged early last week after it became clear that Ethereum would receive spot ETF approval and long-awaited regulatory clarity as a non-security, but this development has sucked the wind out of the ecosystem’s sails Bitcoin. What is going on?

While BTC has made dollar gains amid rumors of ETH ETF approval chances, last week marked the worst performance in BTC Dominance since the arrival of BTC spot ETFs led to massive redemptions for Grayscale Bitcoin Trust (GBTC) in January.

If conducted today, Ethereum’s initial coin offering (ICO) would constitute an illegal security offering; the precedent set by the ETH ETF approval in light of this fact highlights that any crypto asset – regardless of its origin story – it can become a non-security and deals a major blow to doctrines that BTC was uniquely positioned for regulatory capture.

The loss of this distinctive feature is not only weighing on BTC, but has had a major impact on the performance of numerous associated ecosystem tokens.

While Bitcoin remains the oldest blockchain in existence, its non-security status is no longer a significant differentiator when considering alternative crypto investments and forces the ecosystem to compete more on its technological merits.

Unfortunately, Bitcoin’s historical resistance to technological change primarily seeking ultra-hard money has led to a degraded user experience and forced developers to adopt workarounds to deploy applications, leading the network to a low score in this category …

Assets created using native Bitcoin standards such as Ordinals, BRC-20, and Runes had previously received immense interest among investors seeking greater BTC upside, but they are difficult to interact with and have no value beyond speculation.

Developers have attempted to endow the Bitcoin network with improved utility via layer 2, however, existing solutions are simply sidechains that do not inherit any security from the base layer consensus.

Recognizing that BTC is not uniquely positioned to be the only asset with regulatory clarity and access to TradFi, market participants appear to be abandoning BTC-linked tokens, highlighted by the immense weakness experienced by many of these tokens relative to their tokens Ethereum natives. counterparties.

Despite the huge upside these tokens have at times experienced, the loss of the regulatory takeover narrative should lead to these investments trading in line with their fundamentals at valuations comparable to applications on other chains.

Source: TradingView

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