Golden Observation | Ethereum in the eyes of mainstream institutions: Ethereum may surpass Bitcoin5/25/2021 In 2021, the development of Ethereum is remarkable.
According to AssetDash data, Ethereum has the highest market value ranking and has risen to the 14th place in global assets, once surpassing JPMorgan Chase, Bank of America, Paypal, and approaching VISA. Currently, it ranks 27th with a market value of 295.4 billion US dollars. At the same time, the ratio of the market value of Ethereum to the market value of Bitcoin has doubled in the past year. Ethereum accounts for 18.3% of the total market capitalization of the entire cryptocurrency market, while Bitcoin's dominance has dropped to 43.8%. Obviously, as the application of Ethereum continues to expand, the status of Ethereum is not what it used to be. Next, follow us to see Ethereum in the eyes of mainstream institutions. On May 25th, Todd Morley, founder of Guggenheim Investment Company, stated in an interview with Bloomberg TV that the utility of Ethereum is "much higher" than Bitcoin. He believes that any industry without a digital technology strategy will "bankrupt." Ethereum's application developers have grown at a rate of 20 times for six consecutive years, and the large-scale deployment of its utility functions and asset access "has not happened yet, and hopes to become a leader in this area." Investment banking giant Goldman Sachs recently stated in its "Global Macro Research" report that given the importance of practical use in determining the store of value, Ethereum is likely to replace Bitcoin as the dominant store of value. The Ethereum ecosystem supports smart contracts and provides a way to create new applications on its platform. Most DeFi applications are built on the Ethereum network, and most non-fungible tokens (NFT) issued are purchased using Ethereum. Compared with Bitcoin, Ethereum has a larger number of transactions, and this advantage reflects its dominance. In addition, Goldman Sachs also pointed out that blockchain platforms like Ethereum may become a vast market for reliable information providers, just like Amazon is today for the consumer goods market. JP Morgan Chase recognized the value of Ethereum in a report on April 27. He stated that Ethereum had performed significantly better than Bitcoin since the beginning of April and then gave three reasons that Ethereum has outperformed Bitcoin in the report. Reasons: First, the liquidity of Ethereum is more flexible. The liquidity shock in the crypto derivatives market has caused colossal liquidation. In the shock, the Bitcoin futures market was much more affected than the Ethereum futures market. During the market recovery phase, the trading depth of Ethereum recovered rapidly. Second, theEthereum spot turnover rate is much higher than that of Bitcoin, which means that long Ethereum positions are more inclined to hold spots than futures and perpetual contracts. Finally, the transaction activity of the Ethereum network shows the richness of its on-chain activities, including the evolving DeFi and other areas of the ecology. JPMorgan Chase stated that there is a big difference between Ethereum and Bitcoin. Bitcoin is more like an encrypted commodity than a currency and is linked to gold, a valued asset store. Ethereum is the backbone of the cryptocurrency ecological economy and acts as a medium of exchange in the ecology. Yassine Elmandira, an analyst at Ark Investment, said that in the next five years, Bitcoin's return to gold might reach ten times, and Ethereum may bring trillions of dollars in opportunities. Peter Schiff, a gold supporter and Bitcoin opponent predicts that the market value of Ethereum may exceed that of Bitcoin. He explained that although most cryptocurrency buyers realize that Dogecoin is a joke about Bitcoin or Ethereum, they don't realize the joke. But as cryptocurrency speculators turn to Ethereum, they must sell Bitcoin to fund the transaction. It is not so much that Bitcoin surpasses gold, as it is that Ethereum surpasses Bitcoin. Recently, NBA Dallas Mavericks owner Mark Cuban (Mark Cuban) said that the future potential of Ethereum is greater than that of Bitcoin because Ethereum has more application scenarios than Bitcoin, and the market for Bitcoin derivatives is too large. When a callback occurs, this will be a high-risk hidden danger. MicroStrategy CEO Michael Saylor divides the crypto market into crypto assets and crypto applications and claims that Bitcoin is the leader of crypto assets and Ethereum is the leader of crypto applications. No asset can be compared with Bitcoin; Ethereum is a completely different category. A paper recently published by the Federal Reserve Bank of St. Louis delves into the expansion of DeFi and its role in Ethereum. The article believes: "DeFi may lead to a paradigm shift in the financial industry, and may help build a more robust, open and transparent financial infrastructure."
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