- A report by Goldman Sachs has been leaked and it has revealed that the investment bank is backing Ethereum to dominate the crypto market.
- The researchers note that Ethereum will be far more superior to Bitcoin because of its ecosystem.
A new report by investment bank Goldman Sachs has been leaked online. In it was a striking revelation by the researchers. According to the bank, Ethereum will beat Bitcoin to become the best store of value. The 41-page report is titled, Crypto: A New Asset Class? Parts of it have been shared by General Partner of ParaFi Capital, Santiago Roel Santos, on Twitter.
“Ether beats bitcoin as a store of value. The Ethereum ecosystem…provides developers a way to create new apps. Most of DeFi apps are being built on Ethereum. The greater number of transactions in ether vs bitcoin reflects this dominance” – Goldman Sachs Global Macro Research pic.twitter.com/vNkQ1HlDYM
— SantΞago R Santos (@santiagoroel) May 22, 2021
Bitcoin’s strongest argument as a store of value is its scarcity. Because of its limited supply and high adoption, this will continue setting it as an ideal store of value. But the second-largest cryptocurrency has been widening and has created what is easily the largest ecosystem. It has especially been dominating with Decentralized Finances (DeFi). Similarly, NFTs have been a major development in the ecosystem that has boosted the network’s growth in the last couple of years.
Most decentralized finance (DeFi) applications are being built on the Ethereum network, and most non-fungible tokens (NFTs) issues today are purchased using Ether. The greater number of transactions in Ether versus Bitcoin reflects this dominance.
Because of all the development around Ethereum, the researchers predict that there will be a higher demand for Ethereum than for Bitcoin in the future. The researchers note that demand and not scarcity drives the success of store of value.
Ethereum takes on Bitcoin
A number of high profile crypto leaders including Lark Davis have made a similar prediction. The fast growth demonstrated by the Ethereum ecosystem in the last few years has sent shockwaves around the market. However, its success has also been its undoing as it led to high transaction fees and scaling issues. The launch of Etheruem 2.0 will resolve this, leaving little in the way of Ethereum flipping Bitcoin.
In terms of prices, Ethereum has managed to pull away from altcoins by setting a more than double market cap difference between it and 3rd ranked Tether (USDT). Granted, this is the same comparing Bitcoin and Etheruem market caps. However, Ethereum has managed this while struggling with scale and high gas fees which led it to lose dominance to competing blockchains such as Binance Smart Chain.
The two digital assets have been struggling for the last few weeks. Both have drifted away from their all-time highs set earlier in the year. For Ethereum, the altcoin has been trading within the $2,500 region, more than 30 percent below its ATH of $4,300. As for Bitcoin, the token has nearly halved its ATH of $65,000. At the time of press, it is exchanging for $35,000.