ETH to $10K this cycle: Will Ethereum outperform Bitcoin? | Price analysis with Scott Melker

Welcome everyone, to another exclusive cointelegraph interview. I'm your host, Jackson, and today I'm going to be talking to Scott Melker, AKA the Wolf of Allstreets. We're going to be talking about the total cryptocurrency market capitalization, Bitcoin dominance. We'll cover xrp, Ethereum, and we'll also look at some coins that are hot right now. Let's get into it. The total cryptocurrency market cap passed $2 trillion on April 5, according to data from CoinGecko. This came just three months after the cryptocurrency market surpassed $1 trillion for the first time, back on January 7, when Bitcoin was only $33,000. Do you see any signs of the current crypto bull market slowing down?

I don't. I think what's important to note when you're watching it will be obviously the interplay between Bitcoin and alts, Bitcoin dominance and its role. But as a function of total market cap, I think we'll continue to see it rise dramatically. There's so many signs that this will happen. We know that huge money is coming into the space. There's no question that we're going to see more institutional announcements. I think we'll see an etf. I think that we're going to continue to see more corporations and banks like Morgan Stanley and Goldman Sachs starting to offer crypto, even if it's only to their, you know, wealthier clients, as they're doing right now. I just don't see a situation at the most basic level where you have simple supply and demand, where we see much downward movement at this point. If there's increased demand, we're seeing outflows from exchanges, not inflows. Right. So people are buying, it's moving off exchange, there's supply, reducing supply, side shock and more demand. That means the number should continue to go up. So I don't see any reason right now to be bearish overall.

Do you think that it will continue this exponential growth that we saw over the past few months?

Yeah, I think we're only at the beginning of that parabola. I really do. I could be wrong. It's an opinion, you know what I mean? Like, there's a million things that could happen, certainly, but the whole, it's going to zero. It has no value, no intrinsic value. All that. Those narratives are dead, right? It's killed them, it's crushed them. It's proven it's its strength and amazing what can happen in a year. Because last March everyone was saying it was dead and going to zero. And I think that it's proven they were wrong. It's here to stay. Regulators are looking at it. I think it's going to become another normal asset in your average investor's portfolio in the coming years. So I don't see why it would drop dramatically. I do think eventually we'll see less volatility as a result when it becomes more normal and standardized. So maybe the exponential upside that we had for years will slowly diminish with bitcoin itself and we'll see some of that move into altcoins and smaller projects. But I do think that still it becomes a part of every sensible investor's portfolio, even to a small degree.

I think a lot of people feel similarly. But you mentioned altcoins. So I'd like to dive into the current state of the crypto market. At the moment, bitcoin dominance is currently sitting below 60% for the first time since October 2020. Market analyst Michael Van de Pop expects a very bullish summer for altcoins. And you also tweeted on March 29 that altcoins look great. Do you think that we're officially in an alt season 2.0? Some people think that this is now the new altseason.

Do you agree? I think it's been alt season for like four months. And so even when I said that in March, it was kind of tongue in cheek. Honestly, I think it's been somewhat alt season for years. It just depends on which alts are in season. Right. So a lot of people argue that it wasn't alt season last summer when defi projects were pulling 100 and 200 and 300 x's right before that bubble popped, of course. But depending on which market, you look like it's sort of segmented. I mean, look what we've seen in the NFTs in the last six months. If you consider that a part of the crypto market, then that's certainly an alt season, so to speak, or NFT season, if you want to call it that. That said, if you're using dominance as the metric of what an alt season is, we've seen dominance slowly dropping this time. But those 2017 and 18 alt seasons were like a 20% drop in dominance in a week or over four or five weeks. And we're still seeing small movements. So if we start to see that level of dominance drop, the alt season that Michael is talking about could potentially just be mind blowing.

What kind of factors do you think would lead to such a severe drop in dominance to create this summer alt season for altcoins.

I think just consistently and safely lack sideways bitcoin. That's not that volatile at the moment. Listen, if Bitcoin goes up 20% in a week or two, alts are going to suffer, at least on their bitcoin pairs. That's the other important thing here is if you consider alts on their USD pairs, even though they've underperformed bitcoin, if that's how you trade, I mean, they've followed bitcoin right up on this 10 12x in a year, right. Maybe they do 7 or 8x while Bitcoin does a 10 or 12 and you think it's great. While they're getting destroyed by bitcoin, I consider an alt season when you can beat bitcoin. That's the name of the game. Right. So it's all about the trader's definition. And so that's really when bitcoin dominance is dropping. I just think also dominance is a bit more of a difficult metric to use right now because we're seeing so many new altcoins added to the market on a daily, weekly, monthly basis. I mean, the amount of launches of new projects, obviously that plays into more dominance for altcoins and will naturally bring bitcoin dominance. Now there's just more coins competing in that number. But as for factors we would look for, I just think that more strength in the market and overall more money coming in, more confidence, it just naturally trickles down. This is like the only market in the world where trickle down economics actually work. The money comes in first. It comes into bitcoin. Bitcoin is like, I grew up in the United states in the 80s 90s when the war on drugs was initiated. And they always called marijuana the gateway drug. Like all of a sudden if you smoked weed once, you were going to become a crackhead within three years living on the corner. Well, bitcoin's the gateway drug for alts, right? And as more people become interested in bitcoin and it starts to go sideways a little bit or they're not seeing these huge gains, but they start to hear about, oh my gosh, ethereum, what's litecoin? And then pretty soon they're trading like a coin that's 990th in total. Market cap on coin, market cap on uniswap. Like a degenerate. It's just how this market works.

Yeah, the downward spiral is I think, something we've all experienced to some degree.

It's fast, man, it's fast.

So do you think it's too late to hop on the altcoin bandwagon?

No, no, not at all. I think that, you know, if the entire market goes parabolic, they'll be dragged along by the. By, you know, by, by their earlobe, by bitcoin. The big brother, the angry bully Big brother. Listen, you have to time it if you're trying to trade it. But if you're a long term investor, which most people should be, and there's altcoins you're interested in and you just want to responsibly dol to average into them, I'm quite confident you'll be very happy in a year. I don't think you're going to lose money if you invest in altcoins over a longer time period, but you might not do as well as bitcoin. So it really depends on your expectation and what you're trying to accomplish.

So let's take a look at some of these altcoins that have made some particularly interesting moves over the past week or so. Let's start with xrp because everyone seems to be focused on that one at the moment. XRP briefly passed $1 for the first time since 2018, which is quite something. And this may seem surprising to a lot of people because a number of exchanges have delisted XRP following an SEC lawsuit that was filed back in December 2020. But what is your interpretation of XRP's recent pump over a dollar?

I think it shows how nascent this market is, how small this market is and how easily it reacts to small things. I mean, effectively what happened with Ripple, to my understanding, is that a judge ruled discovery on the SEC's documents. So ripple gets a closer look at the claims that the SEC is making. So they can basically work on a technicality to eliminate the identification as a security they're going to see. Basically they're getting an inside look at the SEC's case against them, which they wouldn't have necessarily had. And the market reacted. And of course then you see pundits screaming that the case is over and that Ripple won and that they're going to get relisted. And none of that is the truth. Right? So as usual we get a whole lot of fake news based on a small story. The market pumps. But listen, XRP looked very bottom out. It's not dead. I'm not trading it because historically every time it goes up we see a huge tranche of coins move from Ripple's treasury to exchanges to dump on the fan. Very fans that are buying it now, maybe they can't do that anymore because they're under scrutiny. So maybe it has a clearer path to success as far as price. But yet again, it's important to note, yeah, Ripple's above a dollar, but Bitcoin went up like 14 or 15 times this year. So why is Ripple up? Because bitcoin dragged it up. Right. So yes, in this very temporary window right now it's beating bitcoin and that. But if you look at an XRP chart versus Bitcoin, it's like bottomed out and rounding up. It's not like this mega pump like you kind of see on the dollar chart. So it's. Yet again, it comes down to your interpretation, I think that if the market does well and Ripple doesn't get more bad news, it should naturally rise because it got destroyed. And what goes down generally comes back up. And what goes up generally goes back down. There's a mean reversion to most of these coins. Coins.

So would you say that the fate of XRP is essentially largely dependent on the outcome of this SEC filing?

In the shorter term? Yes. I mean, I think that it would just destroy interest in trading the coin. But then again, I think Ripple is a successful company and xrp, or however they proceed, will be used for cross border payments as they sort of describe. So price and value are not necessarily the same. It could continue to be very functional and a great tool. I mean, if you've ever sent XRP instead of sending Bitcoin, it's lightning fast. I mean it works, it works. So I don't see it dying in that perspective. But if you can't trade it anywhere, it becomes really hard to see the value rise.

Do you have any short term targets for XRP? I think a lot of people were talking about $10 as soon as the $1 mark was crossed.

Oh, people. That's the problem with people. They're not smart. And when people get together in big groups, they become exponentially dumber, it would seem, when it comes to financial markets. Although if you have ever read the book Sapiens, it would argue that the fact that humans can interact in large groups and make decisions is what sets us apart and actually makes us intelligent. But if you read crypto Twitter, you might discount that very quickly. I think $10 is stupid. I'm not saying it's impossible. It's totally possible. But so is $100 and so is $10,000. Anything's possible, but there's no rational reason to be making that guess right now. And I like to stay somewhat grounded. It's just exuberance, you know, it's an irrational exuberance. In fact, the day people start really talking about $10 is probably the day to sell an asset. Not XRP in particular, just general market behavior. When everybody's getting really exuberant and greedy, it's time to sell. It's just the way that markets work.

Seems fair. Wait, let's, let's, let's put aside XRP for the moment and let's move on to Ethereum. A lot of people have been talking about Ethereum lately because Ethereum broke $2,000 quite recently. But I wanted to get your opinion on the comment made by your favorite crypto, Twitter. A pseudonymous trader said that right now ETH is arguably leading the market, whereas Bitcoin is trying to catch up. Would you agree with this?

I think it's hyperbolic. I believe that was wrecked capital. I love that guy. I think he's an incredible analyst and he's actually written stuff for my newsletter before. We're friendly, I love the sentiment, but I don't think there's any point where anything but Bitcoin technically is leading the market. But that said, I'm more bullish on Ethereum than Bitcoin. I have been for quite a while. For different reasons. For different reasons. I think that Ethereum has a chance to outperform as far as price. As a trader, it doesn't mean I'm more bullish on it as an asset. I would much rather hold Bitcoin as an inflation hedge for all those reasons. But if I'm looking at it as a trader, I mean, obviously, listen, gas fees and stuff, that's not sustainable. Using Ethereum is difficult, but the amount of building that's happening on Ethereum, the amount that was staked in Ethereum 2.0, and if we see layer 2 solutions that sort of solve this and we see Ethereum 2.0 be successful, I mean, it's like investing in the Internet in the early 1990s to me. You know, I just think that it has incredible upside potential and it's sort of being, you know, being downplayed. So I think it's hyperbolic again to say that it's leading the market per se, but I do think that it's the best leading indicator of when alts will perform well and during times. I mean, Bitcoin as of today, I know this won't go up today, but it had been trading basically in a 2 to $3,000 range for weeks. It finally broke that down a bit today. But that might just be a shakeout. And during that time, we just saw Ethereum do exceptionally well. So I think that that's a good barometer of what will happen in future times of bitcoin consolidation.

So you said that Ethereum right now is outperforming bitcoin. What kind of timeframe do you see that on? Like, do you see Ethereum outperforming bitcoin this year or just like in the next couple months or something?

Well, right now it's been doing it for two weeks, right. And two weeks is like a really solid time for an altcoin to outperform bitcoin, especially when we've seen bitcoin making moves that strong. But put it this way, I've generally dollar cost average into bitcoin for five years, right? Like daily I almost, I buy a little bit. I switched that largely over to Ethereum, you know, in the last five, six months. So I buy Ethereum every single day. So if my behavior is a determinant, I also buy bitcoin. But if my behavior is a determinant of what I believe, then my conviction and my money says, yeah, I think Ethereum has more upside and I wouldn't be doing that unless it was for, you know, at least a year time horizon, if not more. I just think Ethereum has tremendous, tremendous upside.

Fair. So to wrap things up, you recently did a video about the top 10 cryptocurrencies by market cap in which you analyzed those top 10 coins. Barring tether. Were there any of those coins that particularly stood out to you and got you really excited?

So if bitcoin consolidates, I think large caps will continue to do well and then it will pass on and they'll sort of go sideways to the smaller coins. And down the line, maybe we just saw the first big move on large caps. So if you're talking about very short term, I would say that, you know, the excitement around those is potentially diminished for the coming days. But you know, I think litecoin chart looks exceptional. I mean BNB chart looks exceptional. I think BNB I think could hit $600. I think that Litecoin is potentially targeting around $350. I think that there's a lot of potential movement there. I mean, bitcoin just went into price discovery. Excuse me. BNB Binance coin just went into price discovery against both bitcoin and the USD pairs. So it's not just beating the dollar and trailing Bitcoin, it's beating bitcoin as well and making new all time highs. So if I had to. And obviously Pancake swap and Binance smart chain, there's a lot of bullishness around that quantum and its actual utility. So I think if I had to choose one, that would probably be it. Then Ethereum and Litecoin. Litecoin's just taken an absolute beating. It's like the red headed stepchild of the large caps and so that like I said, you eventually revert to the mean. So we saw a huge sort of move in Litecoin and now it's come back down I think to retest those levels and should be heading back up.

And final question for you, Scott. Do you have any particular price expectations for Bitcoin and Ethereum this year? A lot of people have been throwing around $100,000 for Bitcoin and I don't know what, $10,000 maybe for Ethereum. Do you think those are reachable?

I think that I called for $10,000 Ethereum like two or three months ago and boy did I get a hell lot of hate for that. Which made me a lot more confident that it was certainly possible. But in the short term I think 3600 for Ethereum is what I'm actually looking for just based on the chart. And there was a huge bull pendant that sort of broke out. So I think that that's a reasonable target for, for this year. And that would be a huge move. Right. And also like 10,000. I don't see why that's crazy. It's basically just under a 5x from here. Like we're sitting over 2000. Bitcoin did three times, almost three times that last year. Right. So we know that that can happen in this market. As far as bitcoin, it's hard to put a timeline on it, but I would say Cycle Top will be somewhere in the 2000s reasonably. And that's not a number I come up with technically or whatever. This is what we did. So there's a classic tale called the Parable of the Ox and at a fair there's a famous statistician. And once again, human beings are terrible at making predictions as an individual. But as a group they're shockingly good when you take an average of all of their predictions. So there was this fair and nobody came close. But when you took the average of the few hundred people that had guessed it was within one pound of the weight of an ox that they were supposed to be guessing. And so that's been extrapolated throughout time. And so what people have been doing and what we did, we took all the predictions that we could find. My team, there was someone did it with 100. We took like a 20 from stock to flow to everything. People saying 3,000, people saying a million, and it averaged out to 235,000. So to me, if you just take an average of all these ludicrous predictions in every single direction, that maybe that will give us us target on our cycle highs.

Well, thank you, Scott, for coming on the show today. I really appreciate it.

Thank you, man. It's great.

Thank you, everyone, for watching. That was Scott Melker, AKA the Wolf of all streets. My name is Jackson, and if you enjoyed the video, please hit that, like button and subscribe to our channel.