"Blue Letter" can follow us! Comment: Goldman Sachs says the popularity of Ethereum smart contracts means it could soon overtake Bitcoin to become the largest cryptocurrency by market capitalization.Author: WES | Compiler: Maya | Source: Chinese
In a note to clients on Tuesday, Goldman Sachs noted that the blockchain with the highest “real-world usage potential” is Ethereum, suggesting that Ethereum (ETH) could become the primary digital store of value.
Therefore, Goldman Sachs reportedly predicts that the total market value of Ethereum may exceed the total market value of Bitcoin (BTC) in the next few years.
“Currently, Ethereum appears to be the cryptocurrency with the greatest potential for real-world applications because it is the platform for native digital currencies – Ethereum is the most popular platform for developing smart contract applications.”
Smart contracts include software that can automatically execute digital contracts, and the technology has fueled the boom in decentralized finance (DeFi) protocols and cryptocurrency-based decentralized applications (DApps).
Analysts point out that Bitcoin’s first-mover advantage gives it a stronger brand. However, they believe it lacks some of Ethereum's use cases and lags behind in transaction speed. Due to its focus on hard currency and cybersecurity, Bitcoin is not yet able to offer the same level of functionality as Ethereum.
As a young network, Ethereum is also able to grow at a faster rate than Bitcoin. Bitcoin has grown 261% over the past year, while ETH has grown 856% over the same period.
Despite favoring Ethereum over Bitcoin, analysts also believe gold is a superior store of value than digital assets, describing gold as a "defensive inflation hedge" while cryptocurrencies are a "risk inflation hedge."
“Competition among cryptocurrencies is another risk factor that is preventing them from becoming safe-haven assets at this stage.”
A month ago, analysts at Goldman Sachs Investment Strategy Group told clients that cryptocurrencies were not even an “investable” asset class. Analysts said:
“While the digital asset ecosystem may revolutionize everything in the future, that doesn’t mean cryptocurrencies are an investable asset class.”
The bank isn’t the only one pointing out that Ethereum is somehow surpassing Bitcoin. Its founder and CEO told Kitco News on Monday that Ethereum holdings among the platform’s users have surpassed Bitcoin. I believe it will do this in the wider world in 2022 or 2023.
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