The explosion in bitcoin and cryptocurrency prices has catapulted digital assets into orbit this year, with the performance of the crypto market demanding the attention of Wall Street.
Bitcoin’s rally, which has increased the price of Bitcoin by nearly 300% over the past 12 months, has been dwarfed by Ethereum, the second largest cryptocurrency by value after Bitcoin. The Ethereum price has increased about 800% since that time last year.
As the cryptocurrency industry tries to predict the direction of the market, analysts at Wall Street giant Goldman Sachs have predicted that Ethereum has the potential to dwarf Bitcoin in the years to come – warning that the extreme crypto price volatility means that it cannot compete directly as a safe haven like gold.
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Wall Street giant Goldman Sachs has predicted that the Ethereum price will continue above that … [+]
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Ethereum’s ether token “currently looks like the cryptocurrency with the highest real potential for use, as Ethereum, the platform on which it is the native digital currency, is the most popular development platform for smart contract applications,” Goldman Sachs researchers wrote in reported for the first time by Business Insider in a notice to customers this week.
Ethereum has seen a spate of activity in its network over the past 12 months due to the rising popularity of so-called decentralized finance (DeFi) and non-fungible tokens (NFTs) – both of which are predominantly based on Ethereum’s blockchain.
This year, DeFi, the idea that traditional financial products could be replicated using crypto instead of the bank, has grown into a multi-billion dollar market, while NFTs tokenize all kinds of digital assets and media on the blockchain, the Attention from artists, creators and sports stars.
Goldman Sachs is the latest in a line of investors to call Ethereum a better bet than Bitcoin. Last month, the chief investment officer of $ 100 million Digital Asset Investment Manage Two Prime predicted that Ethereum will eventually “flip” Bitcoin to become the largest cryptocurrency by value.
With a price per coin of $ 32,000, Bitcoin currently has a market capitalization of around $ 600 billion, while Ethereum is worth a combined $ 250 billion at $ 2,100 per ether token.
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Bitcoin price has risen in recent months, dwarfing its previous bull run in 2017. However, … [+]
Meanwhile, Goldman analysts warned that the competition between Bitcoin, Ethereum, and a host of Ethereum rivals that have emerged in recent years is exacerbating volatility and preventing cryptocurrencies from becoming so-called safe havens like gold.
“Gold competes with crypto to the same extent as it does with other risky assets such as stocks and cyclical commodities,” the bank’s researchers wrote. “We see gold as defensive protection against inflation and crypto as protection against inflation with a risk. This competition between cryptocurrencies is another risk factor that prevents them from becoming safe investments at this stage.”
Bitcoin price fell from an all-time high of around $ 65,000 per bitcoin in April after China cracked down on cryptocurrencies in the country again and Tesla billionaire Elon Musk backed off plans for closer Bitcoin integration.
The sudden drop in prices has wiped more than $ 1 trillion in value from the combined market cap of cryptocurrencies in recent months.