According to Deutsche Bank, Ethereum – the world’s second largest digital currency by market cap – is taking on the form of “digital silver.”
Ethereum Is Growing in Popularity
We have been hearing for years that bitcoin – the world’s primary virtual currency – is “digital gold.” Often, gold and bitcoin are compared as one and the same, and yet as of late, the currency has been falling thanks to growing scrutiny in China. The eastern nation has ruled that all crypto transactions and related activities are no longer legal within its borders, and the ceasing of all crypto-based activity within the country is wreaking havoc on BTC’s price.
For many, the day of Ethereum is arriving, and it’s arriving fast. Not long ago, JPMorgan published a report that Ethereum-based futures were beginning to attract many more traders in the digital currency space, and as more individuals dumped their BTC holdings for Ethereum, the latter would ultimately eclipse BTC in the coming future.
In addition, several financial organizations and individuals have gone on to say that Ethereum will one day be the ruling form of crypto in the digital monetary space. Now, according to Deutsche Bank, Ethereum is taking on the form of “digital silver” to bitcoin’s “digital gold.”
Marion Laboure – a senior economist and market strategist at Deutsche Bank – unveiled a new research paper discussing Ethereum and what made it and bitcoin so valuable. She writes:
History shows that humans had always a strong willingness to store their money in an asset which is different from the day-to-day working arrangements of governments and authorities. Until recently, gold has been this primary asset, so I could envision bitcoin to be a kind of digital gold where people can store their value as well.
Ethereum has largely avoided comparisons to silver over the years. When one looks at the currency, it does not come close to bitcoin in many ways. The asset does not boast bitcoin’s price, and its market cap is about half that of BTC. However, where many analysts seem to become ETH fans is in its ability to work with smart contacts.
Some Stiff Competition Coming In
This has made it the go-to network for project developers who have sought to establish new tokens or decentralized finance (defi) apps. With all this in mind, Laboure explains in her document:
Bitcoin is clearly the pioneer, and the most traded crypto. Its market cap is way bigger than the market cap of the number two Ethereum, which offers many applications and use cases, such as decentralized finance (defi) and non-fungible tokens (NFTs). If bitcoin is sometimes called ‘digital gold,’ Ethereum would then be the ‘digital silver!’
However, as time has gone by, Ethereum has faced heavy competition from the likes of Solana, Polkadot, EOS and TRON. All these and more are now able to deploy smart contracts as well.