A Comparison Between Ethereum and Bitcoin’s Inflationary Price

A Comparison Between Ethereum and Bitcoin’s Inflationary Price

Do you think Ethereum is dead because the prices have been down lately? Well, think again because that could not be farther from the truth. There are some striking similarities between how the prices of Bitcoin rose around 2015 and the price of Ethereum right now.

Surely, you can explain all the similarities stating that both these technologies are innovative, but that would not take the whole picture into consideration and the truth is surely more complex than that.

For instance, both of these tokens have been receiving a lot of misleading complaints. Bitcoin “is a Ponzi scheme”, Ethereum is “too centralized” or “is a scam”. These statements were misleading in both cases and help to make the reputation of these tokens worse than it should rightfully be.

Comparing The Prices of Ethereum and Bitcoin

However similar, these tokens are actually very different, too, as Ethereum has the smart contract technology on its side, which is a big differential. In any case, one could actually tell that both Bitcoin and Ethereum share the same inflationary story.

Obviously, the comparison cannot be actually 100% accurate, as Bitcoin came first and there were no Bitcoins when the chain went online. Ethereum, on the other hand, held an Initial Coin Offering in which 70 million tokens were sold. Following, Bitcoin already has an inflation of 100% since its inception, unlike Ethereum.

Take Bitcoin, for instance. Its current inflation is at 4%. Prior to its halving in 2016, it was about 8%. Before the other halving it was 16%. The Bitcoin halvings are automatic and they are ordered by code, which makes an effect on price that is considerably easy to see. Right now, the prices crashed and fell below the price level of a year ago for the first time.

The timeline when you consider Ethereum is considerably more condensed than Bitcoin’s. It rises to $20 USD in 2016 and then to $420 USD a year later. Up until then, its inflation rate was about 16%. However, inflation nearly halved last year. Eventually, the prices go up again at the end of the year.

Following Bitcoin, the prices of Ethereum are behaving in quite the same way with similar inflation rate and also drops. According to this analysis, the price can have a considerable correlation with the level of inflation that the token has.

As ETH is about to halve its inflation rates again per block, which would bring it to 4% in October, it looks like changes are on the horizon. You can see that price has an interesting correlation with the inflation rates of a token and, as ETH and BTC work in a similar way, you can be confident that Ethereum might rise again if Bitcoin does.