Goldman Sachs said in a note to clients on July 6 that the blockchain that has the highest “real use potential” is Ethereum. The bank suggested that ETH may become the dominant digital store of value.
In that case, Goldman projects that the total market capitalization of ether (ETH) may surpass the total market cap for Bitcoin (BTC) in the coming months and years, according to a Business Insider report. The bank insists that the popularity of Ethereum’s smart contracts means that it may surpass BTC as the leading crypto by market capitalization soon.
“[Ether] currently looks like the cryptocurrency with the highest real use potential as Ethereum, the platform on which it is the native digital currency, is the most popular development platform for smart contract applications.”
Smart contracts consist of software enabling the automated execution of digital contracts, with the underlying technology having powered the crypto-powered decentralized applications (DApps) and decentralized finance (DeFi) protocols boom.
Analysts noted that Bitcoin’s first mover benefit had provided it with a stronger brand. But, they believe that it lacks some of the use cases of Ether and it lags majorly in transaction speeds. As a result of its focus on hard money and network security, BTC is yet to offer the same level of functionality as ETH.
Ethereum being a younger network has also managed to grow at a quicker rate than Bitcoin. While Bitcoin expanded by 261% in the last year, ETH was up by 856% within the same period.
Despite tipping Ethereum to outperform Bitcoin, these analysts also insist that gold is a superior store of value to the digital assets. They characterized gold as a ‘defensive inflation hedge’ while crypto is a ‘risk-on inflation hedge.’
“This competition among cryptocurrencies is another risk factor that prevents them from becoming safe-haven assets at this stage.”
This note to its clients comes a month after Goldman Sachs’ Investment Strategy Group analysts told clients that cryptocurrency is not even an ‘investable’ asset class. At the time, the analysts said:
“While the digital asset ecosystem may well revolutionize the future of everything, that does not imply that cryptocurrencies are an investable asset class.”
Banks are not the only ones that have noted Ethereum overtaking Bitcoin in some massive way. The CEO and founder of the Celsius Network, a crypto depository and lending firm with $17 billion in digital assets under management (AUM), told Kitco News on July 5 that Ether has already overtaken BTC in terms of holdings among the platform’s users. The CEO believes that ETH will also overtake BTC in the wider world in 2022 and 2023.